Carnival Slashes Profit Outlook as Iran War Sends Fuel Costs Soaring
Carnival Corp cut its annual profit forecast on Friday, as higher fuel costs pressure the cruise operator's margins amid rising geopolitical tensions.
President Biden on Monday signed a bill to temporarily waive requirements of the Passenger Vessel Services Act (PVSA), allowing foreign-flag cruise ships to sail from Washington to Alaska without making a stop in Canada as normally required by the law.
The bill, which received bipartisan support in Congress, is in response to a Canadian order first put in place in March 2020 in response to COVID-19 banning passenger vessels from its waters until February 28, 2022.
Under the Passenger Vessel Service Act, foreign-flagged passenger vessels are prohibited from transporting passengers between two U.S. ports unless they stop at a foreign port. For Alaska-bound cruise ships departing from Washington, this means a stopover in Canada.
In 2019, the Alaskan cruise industry generated $1.3 billion in economic impact and 23,000 jobs, according to Cruise Lines International Association (CLIA), but 2020’s season was hit hard the suspension of sailings due to COVID-19.
“H.R. 1318, the ‘Alaska Tourism Restoration Act,’ which temporarily allows foreign-flagged cruise ships to sail directly from Washington State to Alaska without having to dock in Canada first until either the date on which Canada lifts restrictions prohibiting cruise ships from docking in its waters due to the COVID-19 pandemic or March 31, 2022,” the White House said in a statement after President Biden signed the bill into law.
In addition to Alaska’s tourism industry, the temporary waiver of the Passenger Vessel Services Act will benefit cruise groups including Carnival Corp., Norwegian Cruise Lines and Royal Caribbean who operate foreign-flagged cruise ships. In anticipation of the bill, all three have announced plans to resume cruises to Alaska beginning this summer.
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