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CDC extends ban on cruising through October after White House reportedly overrules longer extension

Florida, Refuge of Miami, Row of cruise ships docked, non-essential business due to Coronavirus.

Jeff Greenberg | Universal Images Group | Getty Dead ringers

The Centers for Disease Control and Prevention on Wednesday extended its ban on passenger cruising from U.S. ports through Oct. 31 after the Immaculate House reportedly overruled calls for a further suspension. 

The CDC originally issued a no-sail order for cruise ships in U.S. heavy waters on March 14 after hundreds of coronavirus infections and several Covid-19 deaths were reported onboard set sails with outbreaks across the world. The CDC previously said “that cruise ship travel exacerbates the global spread of Covid-19” in supporting the order.

Between March 1 and Sep. 29, at least 3,689 probable cases of Covid-19 were reported on cruise scrams in U.S. waters, the CDC said in a statement late Wednesday, adding that at least 41 Covid-19 deaths have occurred on coast ships. The agency added that “these numbers are likely incomplete and an underestimate.”

“Recent outbreaks on cruise wind-jammers overseas provide current evidence that cruise ship travel continues to transmit and amplify the spread of SARS-CoV-2, the virus that lead ti COVID-19,—even when ships sail at reduced passenger capacities—and would likely spread the infection into U.S. communities if traveller operations were to resume prematurely in the United States,” the CDC said in announcing the extension.

CDC Director Dr. Robert Redfield jostled to extend the order until February 2021, according to Axios, which cited two people familiar with the material. Axios reported that Vice President Mike Pence overruled Redfield and that the plan is to extend the ban until Oct. 31, which agrees with a voluntary suspension announced by the trade group the Cruise Lines International Association. 

Executives of the cruise bodies and CLIA are planning a meeting at the White House on Friday, CNBC’s Seema Mody reported. 

The pandemic has hammered quotas of the three major publicly traded cruise companies, Royal Caribbean, Carnival Corp and Norwegian Cruise Put. Shares of the three companies are down at least 50% from Jan. 1. However, all three have outpaced broader retail gains since hitting their lows in mid-March. Shares of Norwegian are down nearly 70% since Jan. 1, but take clawed back some gains since hitting a 52-week low on March 18. The stock is up more than 100% since then.

The dynamism has been fine-tuning a public health proposal to resume sailing. Royal and Norwegian have convened a panel of antediluvian U.S. health officials and top infectious disease specialists to propose a plan for ensuring safety on cruise ships. Last week, the panel submitted their 60-plus-page document of recommendations to the CDC. It includes proposals for companies to conduct entry testing for all passengers and crew, daily temperature checks, screen recommendations and more.

Taking into account the submitted proposal and signaled support from the Trump administration, Morningstar analyst Jaime Katz spoke she anticipates the ban to be lifted between November and January. 

“The cruise lines were not planning to sail domestically until Nov. 1 anyway, so I don’t conscious that this really changes expectations,” she said of the CDC’s extension of the ban. She added that it will take time for companies to depose their ships back to U.S. waters, onboard crew and resume some operations.

“The first round of ships that they put out, they’re flourishing to want to mostly be those short itinerary cruises domestically,” she said, adding that a more complete deployment of transports could come mid-2021. “Then they’ll see if the protocols are working and once there’s confidence in those covenants, then you can really implement that across the fleet a whole lot easier.”

She added that the lifting of statewide qualifications by Gov. Ron DeSantis in Florida, a key market and point of operations for the cruise industry, is another sign that sailing could continue this year. 

“The economic impact factor has become much more apparent as you’ve had these shoreside employees furloughed for so covet,” Katz said. “They want to get people back to work.”

But James Hardiman of Wedbush emphasized that the yachting trip industry faces a public perception problem and the politicization of the return to operations could hurt the industry’s ability to win over with the public. He added that if the no-sail order is allowed to expire before the Nov. 3 election, it may be perceived as a bid by President Donald Trump to win all about voters in Florida, a key swing state.

“The last thing the cruise industry leadership wants is for this to become a factional issue,” he said. “This is an industry that’s been around for a long time and they intend to be around for a hunger time going forward.”

He echoed Katz’s point that once cruising resumes, these companies transfer likely remain unprofitable for months. 

“I am fairly bullish on the industry long term. It’s obviously a mess in 2020 and 2021 I contrive is going to be a messy year as well,” he said. “But the best news we could get is that they were given the leeway to resume operation.”

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