Why Carnival Corporation Stock Just Sank

What happened

It's finally happened. On Tuesday, August 25, Carnival Corporation (NYSE: CCL) became the first major publicly traded cruise line stock to announce a delay in sailing until 2021.

Not all of Carnival, mind you. For now, only Carnival's Cunard luxury cruise line brand will be pushing cruises into the new year, but even that partial pushback is enough to have all of Carnival stock trading 3.3% lower today, as of 1:25 p.m. EDT.  

Collage showing a cruise ship, a man in a face mask, and coronaviruses.

Image source: Getty Images.

So what

So what did Carnival say, exactly? In today's press release, the cruise line company cited "UK Foreign & Commonwealth Office (FCO) guidance and the complexity of operating world voyages" as underlying its decision to "pause" operations at Cunard.

Three cruise ships are affected. The Queen Elizabeth (QE) will not sail from November 2020 until at least March 25, 2021. The Queen Mary 2 will remain in port until April 18, 2021, and the Queen Victoria -- until May 16, 2021.

Now what

It gets worse.

Because of "ongoing uncertainty over the reopening of many ports and countries, it is sadly not practical to continue" operating the Queen Elizabeth, in particular, on her previously planned itineraries for all of 2021. So "in addition to the pause in operations, all of Queen Elizabeth's sailings due to depart between March 26, 2021 and December 13, 2021, in and around Australia, Japan and Alaska, will be cancelled."

The good news is that QE won't be entirely out of service next year. Carnival will try to replace the canceled cruises "with a programme of shorter duration European holidays ranging from three to 14 nights, departing from Southampton." And the Queen Mary 2's planned "World Voyage" trip, now canceled for 2021, may still take place in 2022.

In short, COVID-19 just struck again -- and once again, Carnival stock is the victim.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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