Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping company, says all options are option to increase the group’s liquidity, while operating expenses of its fleet that is in lay up is about $150 million to $170 million per month.
"Since late January, we have undertaken several proactive measures to mitigate the financial and operational impacts of COVID-19." said Jason T. Liberty, executive vice president and CFO, said in a statement.
"Our focus is on bolstering liquidity through significant cost cutting, capital spend reductions, and other cash conservation measures. In addition, the Company is considering additional financing sources. We continue to evaluate all options available to us to further enhance liquidity."
As of April 30, 2020, the Company had liquidity of approximately $2.3 billion all in the form of cash and cash equivalents.
On May 4, 2020 the company increased the 364-day senior secured credit facility and drew $150 million, further enhancing the Company's liquidity profile.
The company has taken significant actions to reduce operating expenses during the suspension of its global cruise operations. Significantly reduced ship operating expenses, including crew payroll, food, fuel, insurance and port charges.
The company's ships are currently transitioning into various levels of layup with several ships in the fleet transitioning into cold layup, further reducing operating expenses.
The company estimates that its average ongoing ship operating expenses and administrative expenses is approximately $150 million to $170 million per month during the suspension of operations. RCCL may seek to further reduce this average monthly requirement under a prolonged non-revenue scenario.