The massive $2-trillion coronavirus relief package signed into law Friday by President Trump will likely not set aside funding for one of the industries hit hardest by the coronavirus outbreak: the cruise lines.
While the package — the biggest funding bill in U.S. history — is expected to help the ailing airlines and hospitality companies, cruise lines that have all but stopped sailing, including Carnival, Royal Caribbean and Norwegian, don’t appear to qualify for loans or relief grants.
The stimulus package includes $500 billion in loans for struggling businesses, $377 billion in loans and grants for small businesses, $150 billion for local, state and tribal governments facing a drop in revenue and $130 billion for hospitals dealing with an onslaught of patients.
But a segment of the funding bill that would apply to the cruise industry limits aid to “an entity or business that is domiciled in the United States with significant operations and employees located in the United States.” That restriction would likely exclude companies such as Carnival Corp., Norwegian Cruise Line Holdings Ltd. and Royal Caribbean Cruises Ltd.
Carnival, Royal Caribbean and Norwegian have headquarters in the U.S. but most of the ships are registered in Panama, Bermuda or elsewhere and are staffed with employees hired outside of the U.S. to avoid paying U.S. taxes and abiding by U.S. employment rules.
Trump, who has spoken out about helping the cruise lines, acknowledged the problem during a media briefing Thursday when he said he favors having cruise lines register their ships in the U.S.
“It’s very difficult to make a loan to a company when they are based in a different country,” Trump said. “But that being said, they have thousands and thousands of people that work there and, almost as importantly, that work onshore, filling these ships with goods and products.”
Even so, the cruise industry wasn’t complaining Friday about being left out of the funding package.
“We did not ask nor expect a cash bailout from the U.S. government,” said Roger Frizzell, a spokesman for Carnival. “We recently secured $3 billion from our revolver [credit line] and we have significant assets around the world.”
Asked about the U.S. funding bill, Royal Caribbean directed reporters to a March 23 news release that said the company had “entered into a $2.2 billion, 364-day secured term loan facility, further enhancing the company’s liquidity position.”
In addition, Royal Caribbean said it has “over $3.6 billion of liquidity comprised of cash deposits and its existing undrawn revolving credit facilities” and had already committed financing for all of its new ships on order.
“This is a period of unprecedented disruption for the cruise industry,” Jason T. Liberty, Royal Caribbean executive vice president and chief financial officer, said in the release. “We continue to take decisive actions to protect the company’s financial and liquidity positions as they enable us to keep focused on our guests, our crew and our long-term plans.”
Norwegian Cruise Lines could not be reached for comment.
Bari Golin-Blaugrund, a spokeswoman for the Cruise Line Industry Assn., said the trade group that represents most of the world’s biggest cruise companies was focused on getting funding support for the more than 30,000 travel agents “who are very much in need of relief as a result of the slowdown in cruise operations.”
“We are grateful that they will receive support as a result of this bill,” she said.
Cruise lines support more than 421,000 American jobs and annually contribute about $53 billion to the U.S. economy, according to the Cruise Line Industry Assn.
But several lawmakers, including Sen. Democratic Leader Charles E. Schumer, and labor groups and environmental organizations have spoken out against providing federal funding or loans to the cruise lines.
Cruise industry often registers abroad to avoid US taxes, environmental regs, worker rights— Chuck Schumer (@SenSchumer) March 27, 2020
Now seems they want a taxpayer-funded bailout?!
No—We rebuffed GOP attempts to bailout companies registered abroad
Cruise companies registered or organized off our shores won't qualify https://t.co/VMv7kVI2IL
The International Organization of Masters, Mates & Pilots, which includes 5,500 licensed deck officers and mariners who work on tug, ferry and harbor tour vessels, among others, issued a statement Friday saying the group was “gratified that federal stimulus funds will not be extended to flag-of-convenience, tax-dodging cruise ship companies.”
“While many of these businesses are American-owned and publicly traded, they choose to sail under the flags of the Bahamas, Panama and other nations in order to avoid hiring Americans, paying reasonable wages and adhering to our labor and environmental standards,” the group said.
Several lawmakers including Reps. Jackie Speier (D-Hillsborough) and John Garamendi (D-Walnut Grove) wrote to House Speaker Nancy Pelosi (D-San Francisco) and Majority Leader Steny Hoyer (D-Md.) on Monday, urging that strong conditions be included in the package before any aid is offered to cruise lines.
“If cruise lines want aid from the U.S. government, they should play by its rules and uphold its values,” the letter said.
Environmental groups that have accused cruise lines of polluting the air and seas, also wrote to Pelosi and other lawmakers earlier this month, urging them not to include financial aid to the cruise industry.
“Providing U.S. taxpayer dollars to massive foreign cruise ship corporations that pollute our environment, take advantage of tax loopholes, and flag ships in foreign countries would allow the cruise industry to return to business as usual, which is unacceptable,” according to the letter from Friends of the Earth, Stand.earth and Greenpeace.
Responding to such accusations in the past, the Cruise Line Industry Assn. has said the cruise industry has invested heavily in innovative technologies to reduce air and water pollution and adheres to regulations imposed by such agencies as the International Labour Organization, the World Health Organization, the U.S Coast Guard, the Centers for Disease Control and Prevention and the Environmental Protection Agency.