Cruise Industry Sailing in Uncharted Waters in Bailout Program

 thestreet.com  03/26/2020 20:18:00 

The cruise ship industry's eligibility for loans under the coronavirus stimulus package is in question.

CNBC on Thursday cited a senior administration who official who said that a bipartisan Senate group is working to ensure the industry can access one of the facilities, or else will seek a legislative fix in the next financial package.

The cruise industry, unlike airlines wasn’t mentioned in the $2 trillion coronavirus stimulus package approved by the U.S. Senate late Wednesday. 

Critics of the industry say that while most cruise ships are headquartered in the U.S., they are registered abroad and don’t pay U.S. taxes. The lines are also exempt from many U.S. labor and safety regulations.

The cruise-ship industry has been battered by the coronavirus, as health experts say that it is the most susceptible to spreading the disease.

The Centers for Disease Control and Prevention specifically lists avoiding cruise ships for all travelers but specifically for travelers with underlying health issues. 

The CDC released a report saying the coronavirus survived for as long as 17 days aboard the Diamond Princess cruise ship. The study examined outbreaks on the Diamond Princess ship in Japan and the Grand Princess ship in California. 

Norwegian Cruise Line Holdings  (NCLH) - Get Report, Royal Caribbean Cruises  (RCL) - Get Report and Carnival Cruise Lines  (CCL) - Get Report all saw their shares plummet in the early days of the crisis, but shave rallied recently with all three companies posting significant gains. 

The picture became a little cloudier on Thursday, however, with both Royal Caribbean and Norwegian Cruise Line slipping into negative territory. Carnival was the only holdout, climbing 14.5% to $17.81 in late day trading.

The bailout states that in order to be eligible for relief, a company must be “created or organized in the United States or under the laws of the United States” and “have significant operations in and a majority of its employees based in the United States."

The Cruise Lines International Association (CLIA), the cruise industry trade association, said that the industry supports roughly 421,000 American jobs, and nearly 40% of the 1.17 million industry-supported jobs globally are based in the U.S. 

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