Cruise lines, many of which were forced to suspend sailings, have been battered by the coronavirus pandemic.
As their stocks plummet, its not clear if the companies will receive the same aid going to airlines and other businesses.
The bill passed by the Senate Wednesday that’s likely headed to the House of Representatives on Friday says eligible companies “must be organized in the United States or under the laws of the United States.”
But cruise lines register their ships in other countries, often in the Caribbean, to skirt US regulations.
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Many of the world’s largest cruise lines have completely halted sailings as the spreading coronavirus throws entire economies into disarray.
But unlike airlines, which are set to receive a cash infusion from Congress’ $2 trillion financial bailout package, cruise companies might not see a single cent.
The version of the bill as passed by the Senate Wednesday night and likely to be voted on by the House of Representatives as soon as Friday contains specific language for air carriers. Businesses in other industries not specified are also eligible for $4.5 trillion in loans, but only those that “are created or organized in the United States or under the laws of the United States and that have significant operations in and a majority of its employees based in the United States. “
That’s where things get tricky for cruise lines.
In an effort to skirt American regulations, cruise ships are often registered in foreign countries in a practice known as “flags of convenience.” Often, these are small Caribbean countries like Panama or the Bahamas. In addition to tax loopholes, these domiciles also conveniently come with lower minimum wages and fewer regulations, according to Politico.
CNBC reported Thursday that even industry insiders were unsure about cruise lines’ ability to access the relief soon to be passed by Congress and signed into law by President Donald Trump.
Meanwhile, ships sit docked and stock prices remain near all-time lows.
Shares of Carnival, Norwegian, and Royal Caribbean are down 65%, 73%, and 70%, respectively, since the beginning of the year. All three companies have suspended sailings for the time being. Some smaller companies are still operating, but many ports are barring entry to cruise ships after many saw scores of passengers infected with the virus.
While the state of relief remains in limbo, the industry’s lobbying arm — which spends more than $3 million annually, according to Politico — is likely to kick into high gear to make sure any secondary rounds of relief include cruise lines. At the same time, layoffs are rocking the industry.
Publicly, at least, Carnival is taking a more positive outlook. CEO Arnold Donald told staffers in a video dated March 20 and viewed by Business Insider that the company isn’t planning mass cuts in employee headcount or pay.
“What I can tell you is that we have charted a clear course for the next 90 days and that right now we are very encouraged that …read more
Source:: Business Insider