What cruises of sickness? Helloworld sees sales spike

The key driver was September losses being only $800,000. The company has cut a large number of expenses – almost 250 of 1000 Australian staff remain stood down. Overall salary costs fell from $12 million in February to $3 million per month in the quarter, after government subsidies.

Demand is mostly low in new airline bookings, for instance, at less than 90 per cent of the September quarter in 2019.

Yet there has been a remarkable comeback in cruise lines. Between May and August, bookings remained down 80 per cent on the same time a year earlier.

But in September, Princess Cruises released for sale a 107-night round-the-world cruise from Sydney to Sydney, scheduled to depart in May 2022.

Ocean cruise sales that month more than doubled figures for September 2019, with more than $30 million in bookings flowing through Helloworld. “This shows the extraordinary pent-up demand for travel, for cruise travel, for international travel and travel with Princess Cruises,” Helloworld said.

About one-quarter of the bookings were customers with credits, having had their cruises cancelled for this and next year. But 74 per cent were “new bookings with new customers”.

The willingness to travel comes despite cruise lines being shuttered globally after infections spiked on board, along with border closures.

A NSW special commission looking at the Ruby Princess debacle found that of 1682 passengers from Australia, 39.4 per cent contracted COVID-19. On the Diamond Princess cruise ship, stopped in Japan, 19.2 per cent of 3711 passengers tested positive, the commission’s report said.

Travel bubbles

Helloworld estimated that its overall revenue for the December quarter would be between 10 per cent and 15 per cent of the same time a year earlier. That was expected to lift to 15 per cent to 20 per cent in the March quarter, Helloworld said.

It expected to be break-even or better by this financial year’s fourth quarter. “This is conditional upon all domestic borders being open by [that quarter] and reasonable travel bubbles being open around the Pacific, Japan and Asia for Australians and New Zealanders,” Helloworld said.

It had $85 million in free cash in mid-October and $29 million available to tap in borrowings, the company said. It estimated liquidity was enough to maintain operations “well into 2022 or longer”.

RBC Capital Markets analyst Tim Piper said Helloworld’s corporate travel business was at 40 per cent of levels and this was “not dissimilar to peers”, while its wholesale business could benefit when state borders reopen.

“However, Helloworld has an outsized exposure to Australian international leisure travel and inbound travel, which is likely to result in a prolonged recovery in profitability,” Mr Piper said.

Earlier this month, Brisbane-based Corporate Travel Management argued that September was its “best month” since COVID-19 hit, with an “underlying” EBITDA loss of $1.6 million. The Australia-New Zealand division posted a profitable quarter and monthly cash burn overall was running at $5 million a month in that quarter.