The H1N1 influenza outbreak in Mexico may reduce Royal Caribbean Cruises Ltd. earnings by as much as $47 million this year. In a financial advisory June 9 the company estimated the bottom line impact at 22 cents per share; the company has about 214 million shares outstanding.
Royal Caribbean may suffer a disproportionate impact compared with other cruise firms because the outbreak not only forced it to reroute vessels away from Mexico for a month but also delayed the launch of Pullmantur's Pacific Dream, a new product targeting Mexican nationals. The ship remains idle, according to the company. The outbreak also resulted in a significant reduction in Pullmantur's tour capacity in Mexico, the company said.
"The flu outbreak had a short but highly disruptive impact to our operations," Richard Fain, chairman and CEO of RCCL, said in the financial advisory. "Fortunately, our vessels are quickly returning to their original itineraries, but the impact from the publicity surrounding the H1N1 virus on our Mexican business is frustrating."
On April 28, after news of the H1N1 flu broke, Royal Caribbean temporarily suspended port calls in Mexico and didn't resume until its ships began calling in Cozumel on sailings that departed on or after May 24.