The massive $ 2 trillion coronavirus rescue program signed by President Trump on Friday is unlikely to set aside funding for one of the industries hardest hit by the coronavirus epidemic: cruise lines.
While the package – the the biggest funding bill in U.S. history – should help airlines and hotel companies in difficulty, cruise lines which have practically stopped sailing, in particular Carnival, Royal Caribbean and Norwegian, do not seem to be entitled to loans or subsidies.
the the recovery 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 declining revenues, and $ 130 billion for hospitals facing a wave of patients.
But a segment of the funding bill that would apply to the cruise industry limits aid to “an entity or company domiciled in the United States with significant operations and employees located in the United States.” This restriction would likely exclude companies such as Carnival Corp., Norwegian Cruise Line Holdings Ltd. and Royal Caribbean Cruises Ltd.
Carnival, Royal Caribbean, and Norwegian are headquartered in the United States, but most ships are registered in Panama, Bermuda, or elsewhere, and have employees hired outside the United States to avoid paying U.S. taxes and comply with American employment rules.
Trump, who spoke of helping cruise lines, acknowledged the problem at a press conference on Thursday when he said he was in favor of cruise lines registering their ships in the United States.
“It is very difficult to lend to a business when it is based in another country,” said Trump. “But that being said, they have thousands and thousands of people working there and, almost as important, working ashore, filling these ships with goods and products.”
However, the cruise industry did not complain on Friday that it was excluded from the funding.
“We have not asked for or hoped for a US government bailout,” said Carnival spokesman Roger Frizzell. “We recently got $ 3 billion from our revolver [credit line] and we have significant strengths around the world. “
When asked about the US funding bill, Royal Caribbean directed reporters to a March 23 press release that said the company had “entered into a $ 2.24 billion, 364 day guaranteed term loan facility.” , thereby improving its liquidity position. “
In addition, Royal Caribbean said it has “more than $ 3.6 billion in cash from its cash deposits and existing revolving credit facilities” and has already committed financing for all of its new ships on order.
“This is an unprecedented period of disruption for the cruise industry,” said Jason T. Liberty, executive vice president and chief financial officer of Royal Caribbean, in the release. “We continue to take decisive action to protect the company’s financial and liquidity positions as they keep us focused on our customers, our crew and our long-term plans.”
Norwegian Cruise Lines could not be reached for comment.
Bari Golin-Blaugrund, spokesperson for Cruise Line Industry Assn., Said the business group that represents most of the world’s largest cruise lines is focused on obtaining financial support for more than 30,000 agencies trips “that really need help” due to 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 jobs in the United States and contribute approximately $ 53 billion annually to the US economy, according to Cruise Line Industry Assn.
But several lawmakers, including Democratic Senator Charles E. Schumer, as well as labor groups and environmental organizations have spoken out against granting federal funding or loans to cruise lines.
The cruise industry often registers abroad to avoid US taxes, environmental regulations and workers’ rights
Now seems they want a taxpayer funded bailout ?!
No – We have postponed GOP attempts to bail out foreign registered companies
Cruise companies registered or organized offshore will not be eligible https://t.co/VMv7kVI2IL
– Chuck Schumer (@SenSchumer) March 27, 2020
The International Masters, Officers and Pilots Organization, which includes 5,500 licensed deck officers and sailors who work on tugs, ferries and tour boats in the port, among others, released a statement on Friday saying that the group was “delighted that the federal stimulus funds were not being extended. cruise ship companies that avoid taxes and under flags of convenience. “
“While many of these companies 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 and paying reasonable wages. and meet our labor and environmental standards, “said the group.
Several lawmakers, including representatives Jackie Speier (D-Hillsborough) and John Garamendi (D-Walnut Grove), wrote Monday to Speaker Nancy Pelosi (D-San Francisco) and majority leader Steny Hoyer ( D-Md.), To insist conditions must be included in the package before any assistance to cruise companies.
“If cruise lines want help from the United States government, they must follow its rules and defend its values,” the letter said.
Environmental groups that accused cruise lines of polluting the air and the seas also wrote to Pelosi and other legislators earlier this month, urging them not to include financial assistance to the cruise ship industry. .
“Providing US taxpayers dollars to large foreign cruise ship companies that pollute our environment, take advantage of tax loopholes and fly the flag of ships in foreign countries would allow the cruise industry to resume operations, which is unacceptable,” according to the letter Friends of the Earth, Stand.earth and Greenpeace.
Responding to such accusations in the past, the Cruise Line Industry Assn. said the cruise industry has invested heavily in innovative technologies to reduce air and water pollution and adheres to regulations imposed by agencies such as the International Labor Organization, the World Organization for health, the United States Coast Guard, the Centers for Disease Control and Prevention and the Environmental Protection Agency.