Port Canaveral ended its 2019-20 budget year with an $18.36 million loss, officials reported Wednesday, attributing much of the loss to the coronavirus pandemic, which has idled cruise operations since mid-March, according to News 6 partner Florida Today.
The Centers for Disease Control and Prevention’s no-sail order for cruise lines is scheduled to expire Saturday. But the CDC has the option to extend the order for a fourth time — as it did in April, July and September.
After the no-sail order is lifted, Port Canaveral Chief Executive Officer John Murray said he expects it will be another 45 to 60 days before cruising resumes at Port Canaveral.
Murray said cruise lines would need to reassemble their ship crews, who live throughout the world, and to prepare ships that have not taken on passengers since March for commercial voyages. Additionally, the ships will have to sail back from their current locations to Port Canaveral.
“We’re hopeful that this is the weekend that we can get the green light (from the CDC) to start putting things forward,” Murray told Canaveral Port Authority commissioners at their meeting on Wednesday.
During Wednesday’s meeting, port commissioners unanimously approved increasing the port’s line of credit with Truist Bank to $35 million, an increase of $10 million. That’s on top of a $10 million increase port commissioners approved in August, from $15 million to $25 million, for the line of credit with Truist, which is the bank that was formed by the merger of SunTrust and BB&T.
Port Canaveral Chief Financial Officer Michael Poole said the increased line of credit gives the port “a cushion … for emergencies only,” in case the restart of cruise operations is significantly delayed in 2021, and the port’s revenue continues to be negatively affected.
Poole said the line of credit can be used for capital expenses or operating expenses “to cover any revenue shortfalls that we might have.”
Poole said he will seek the approval of port commissioners before tapping into the line of credit, after being asked by Port Commissioner Robyn Hattaway to confirm that point on the record.
“It wouldn’t be done in a vacuum,” Poole said.
“It’s like the bank giving you a higher limit on your credit card,” Murray told port commissioners. “It doesn’t mean you’re going to spend it.”
The increased line of credit will not affect the port’s credit rating, unless the port taps into the money, Murray said.
Port Authority Secretary/Treasurer Jerry Allender said the move by Poole to work with the bank to increase the line of credit is “forward-thinking.”
Port Authority Vice Chair Wayne Justice said he appreciated Poole’s “ingenuity” in working on the line-of-credit issue.
“This is really putting us in good stead for a really unknown year coming up,” Justice said. “And this is buying us some reserve.”
The port’s $18.36 million loss for the budget year that ended Sept. 30 compares with a profit of $24.26 million in the 2018-19 budget year.
Operating revenue decreased from $106.51 million in 2018-19 to $67.11 million in 2019-20.
Of those figures, cruise ship and cruise-related parking revenue totaled $81.91 million in 2018-19, representing 76.9% of overall operating revenue; and totaled $44.10 million in 2019-20, representing 65.7% of overall operating revenue.
The port’s 2019-20 cruise revenue primarily represents the pre-pandemic cruise operations from October 2019 to March 2020. But it also includes revenue related to the Port Canaveral-based Victory Casino Cruises gambling ship, which is not covered by the CDC no-sail order and has resumed sailing, as well as occasional stops by cruise ships to Port Canaveral without passengers so the ships can be fueled and resupplied.
Among other major Port Canaveral business lines:
- Revenue from cargo operations rose from $9.27 million in 2018-19 to $9.63 million in 2019-20. The port’s cargo volume from lumber and other construction and road-building material was strong. But the volume of petroleum shipments into the port was down 33.2%, reflecting a COVID-19-related decrease in driving and air travel.
- Revenue from leases rose from $9.25 million in 2018-19 to $9.70 million in 2019-20.
- Revenue from recreation operations fell from $3.31 million in 2018-19 to $2.03 million in 2019-20, reflecting extended shutdowns of Jetty Park’s campgrounds and Exploration Tower.
Port officials contend that the 74 recommendations from the cruise industry trade group the Cruise Lines International Association and individual cruise lines will make cruising safe.
These include mandated COVID-19 testing of passengers and crew, temperature checks, social distancing, limits on ship capacities and strict controls on shore excursions. Cruise lines also are expected to focus on shorter cruises, have staggered passenger boarding times, and have increased medical personnel and facilities onboard ships.
Last week, a coalition of cruise industry employees and their supporters, led by members of the International Longshoremen’s Association, rallied outside Port Canaveral’s Cruise Terminal 1, seeking an end to the CDC’s no-sail order.
Port Canaveral was the world’s second-busiest cruise port in terms of passenger volume, trailing only PortMiami.
Four major cruise lines have ships based at Port Canaveral — Carnival, Disney, Norwegian and Royal Caribbean. A fifth cruise line, MSC Cruises, was planning to base a ship there before the end of the year.
Port Canaveral has reduced its staff from 268 positions to 153, largely because of lost revenue related to the cruise industry shutdown. That was done through a combination of 68 permanent layoffs, 17 unpaid furloughs, and not filling 30 positions that were left vacant because of retirement or employees taking jobs elsewhere.
The port also has reduced non-payroll expenses in a variety of areas, including service contracts, maintenance and utilities.
The port pays for its expenses through its revenue from cruise, cargo, real estate, recreation and other sectors. It does not levy a tax on residents of the port district in the northern half of Brevard County.
In addition to the port itself, local hotels, restaurants and retail shops — particularly in the Cape Canaveral and Cocoa Beach areas — have lost business revenue they normally would receive from cruise passengers staying on the Space Coase before or after their cruises.