Shares of cruise lines have taken on more water after the industry’s major players were shut out from government assistance as part of the major economic-recovery bill signed by President Donald Trump on Friday
The bill passed by Congress says companies getting loans or loan guarantees must be “organized” in the U.S. under American laws and have a majority of their employees based in the U.S.
Carnival Corp. is registered in Panama, England and Wales; Royal Caribbean Cruises is chartered in Liberia; and Norwegian Cruise Line Holdings is flagged in Bermuda.
The cruise lines could still get a lifeline from taxpayers. Lawmakers could reconsider aid if it looks like the industry is in serious jeopardy of going under.
A Senate Republican aide familiar with the negotiations said Democratic senators balked at helping the cruise lines. It did not become a sticking point because lawmakers from both parties were eager to act swiftly on the bill, added the aide, who spoke on condition of anonymity to discuss behind-the-scenes talks.
Sen. Sheldon Whitehouse, D-R.I., tweeted:
“The giant cruise companies incorporate overseas to dodge US taxes, flag vessels overseas to avoid US taxes and laws, and pollute without offset. Why should we bail them out?”
Trump seemed to endorse that argument Thursday. The president said he liked the idea expressed on Twitter by Sen. Josh Hawley, R-Mo., that cruise lines should come back to America and pay their taxes:
“I do like the concept of perhaps coming in and registering here, coming into the United States.
“It’s very tough to make a loan to a company when they are based in a different country, but with that being said, they have thousands and thousands of people that work there.”
Then Trump left the door open to helping the cruise lines some other way.
“Look, it’s a big business, it’s a great business,” Trump said. “So we are going to work very hard on the cruise line business, and we are going to try and work something out.”
In trading Friday, Carnival’s stock dropped 19%. Royal Caribbean fell 15% and Norwegian sank more than 23%.
Cruise ships and airlines are two of the industries hit hardest by the new coronavirus outbreak, and Trump has spoken repeatedly about helping both.
But while U.S. passenger airlines got special treatment from Congress (they will be able to seek $50 billion in grants and loans under the economic-stimulus bill) the cruise industry was left high and dry.