Johanna Jainchill
Despite initial optimism around the CDC's decision to drop its No Sail Order, several cruise industry analysts predict that a resumption of commercial cruises is unlikely until February.
The order was replaced with a framework for resumption that includes a lengthy list of requirements. Each ship needs to be granted a Conditional Sailing Certificate to operate in U.S. waters -- and the application itself must be made at least 60 days before the launch of passenger service, which is likely to push any sailing in U.S. waters until at least early January.
In a note to investors titled "Restart Not Prohibited, But Restart Not Yet Allowed," Robin Farley of UBS said that the requirements for cruising that replaced the No Sail Order and the "description of timing sounds a lot like the No Sail Order, but without a set period of expiration" a reference to published reports that CDC director Robert Redfield had at one point hoped to push the No Sail Order expiration to February.
"Although the headline reads that the No Sail Order has been lifted, it is replaced with a requirement for new approvals that are now necessary before cruising can restart," she said. "So restarting is not prohibited, but restarting is also not allowed yet."
Farley said the timeline of the requirements would likely push any revenue cruises to February.
"Bottom line is that cruise lines will not be able to offer passenger cruises in December, but January seems possible, though February more likely, in line with what the CDC was reportedly already targeting," she wrote.
Patrick Scholes of Truist Securities said of the order, "There is a pathway forward... But it's hardly an easy or quick one.
"The good news, and what got some investors excited on Friday afternoon, was the headline that the CDC is letting the No Sail Order expire and cruises can have a phased resumption once (many) conditions are met," he wrote.
But based on the conditions, he believes no restart will happen until at least February, "in the best case scenario."
"During the ramp-up phase, we believe there will be an intense microscope placed on the cruise lines by the CDC and the media," he said. "In our view, as the Covid curve in the U.S. has yet to be flattened and is trending upwards in many states, there is significant risk things may not initially go smoothly; the onus is placed on the cruise lines to get it right, and if they do, their stocks should be rewarded accordingly."
Scholes also said he expects that "many law firms are waiting in the wings if the cruise lines fail to prevent any outbreaks aboard their ships.
"There is now a pathway forward for the cruise lines, but we continue to believe that it will take a widely distributed vaccine for this industry to really begin to return to normal," he wrote.