Norwegian Cruise Line Announces Serious Financial Issue May 5, 2020

Breaking Travel News

Norwegian Cruise Line Holdings Ltd., amended a filing with the Securities and Exchange Commission this morning (Tuesday May 5th, 2020). The filing from the Miami-based company’s independent accounting firm states the company expects it will need additional financing to satisfy outstanding debt, and without funds coming in from its three cruise line brands – Norwegian Cruise Line, Oceania and Regent Seven Seas – it does not have enough liquidity to satisfy its financial obligations going forward.

This is very concerning to us. Travel is our life at this point and cruising is a significant part of our travel plans. It isn’t just cruise lines affected. It’s travel agents and businesses, airlines, tour operators, a whole line of dominoes that will potentially fall

As mentioned in previous postings we have been concerned about the PR nightmare for the cruise companies and do recognize the financial impact of this COVID-19 crises on them. The NCL announcement is the first indication that the industry is now at serious risk. The cruise business is not alone in this crises. There are strong indications that huge numbers of smaller businesses will not be able to survive COVID-19 policies from restaurants, independent theaters and retail business small and large. Last week Neiman Marcus indicted it would be filing for bankruptcy and apparel store J. Crew announced yesterday, May 4, 2020, that it has now filed for Chapter 11 bankruptcy.

As financial doom approaches and lockdown orders continue to be extended in some states while others are attempting to re-open it needs to be asked – on the authority of what statutes are these actions being taken? How extensive are the emergency powers of governors and even the President.

We, as a people, are supposed to rest assured that this is a nation of laws and those laws encompass the entirety of rules that our government can exercise. There can be no exercise of authority over any entity if there is no specific law or regulation in effect allowing it.

On Sept. 14th 2011 President Bush signed an executive order taking emergency actions to fight terrorism that included military action without congressional approval. Executive Orders, by law, have strict limitations and require re-authorization and supervision by congress. Bush’s order remained in effect through his term and in 2016 President Obama signed a re-authorization of that act.

Effective March 1, 2020 the President of the United States issued an Executive Order declaring a national emergency relating to COVID-19. There is nothing in that order or any additional emergency orders that relates to international or national airlines or cruise ship companies except specifically “suspending entry of foreign nationals seeking entry who had been physically present within the prior 14 days in certain jurisdictions where COVID-19 outbreaks have occurred, including the People’s Republic of China, the Islamic Republic of Iran, and the Schengen Area of Europe”.

Under Federal Statutes the Center for Disease Control has a number of statuary powers to help prevent the spread of contagious diseases. The regulations and laws relating specifically to the CDC and air and sea carriers bringing individuals into this country are contained in 42 Code of Federal Regulations parts 70 and 71, where the CDC is authorized whenever the Director has reason to believe that any arriving carrier or article or thing on board the carrier is or may be infected or contaminated with a communicable disease, he/she may require detention, disinfection, disinfestation, fumigation, or other related measures respecting the carrier or article or thing as he/she considers necessary to prevent the introduction, transmission, or spread of communicable diseases. To detain, medically examine, and release persons arriving into the and traveling between states who are suspected of carrying these communicable diseases.

Nothing in these regulations shall affect the constitutional or statutory rights of individuals (entities) to obtain judicial review of their federal detention or order.

The only possibility for authority to issue a “Do Not Sail Order” to all cruise ships is in the wording “or other related measures respecting the carrier or article or thing as he/she considers necessary to prevent the introduction, transmission, or spread of communicable diseases” and that would be a stretch considering the word “related” referring to the preceding techniques. Why cruise ships and no “Do Not Fly Order”? Perhaps grounding airlines is too obviously illegal under the statutes?

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