3810
Views

Japanese Cruise Operator Files for Bankruptcy, Citing Coronavirus

at
The Luminous Kobe 2 (Luminous Cruising / Facebook)

By The Maritime Executive 03-03-2020 10:40:00

A small cruise operator in Kobe, Japan has filed for bankruptcy due to the effects of the coronavirus outbreak. The epidemic has led to extensive disruption for the cruise industry in Asia, and harbor cruise operator Luminous Cruising Co. said in court filings that customer cancellations related to COVID-19 have pushed it into insolvency. 

Luminous Cruising operates the 2,000-passenger Luminous Kobe 2, one of Japan's largest dinner cruise vessels. The firm was already struggling financially due to high fuel prices and a series of natural disasters that affected the region in 2018. The new customer cancellations made it necessary for Luminous to pursue a bankruptcy filing, the company said. 

"Numerous cancellations appear to be the aftermath of the new coronavirus. Leaving the status quo as it is will cause significant inconvenience to creditors. It is inevitable, so today we will file a petition for the commencement of civil rehabilitation proceedings," Luminous said in a statement. 

Sailings aboard Luminous Kobe 2 have been temporarily suspended. Passengers with valid tickets will be accommodated on the vessel Kobe Concerto instead, thanks to a cooperative agreement with operator Kobe Cruiser Co., Ltd. 

Japan has registered about 235 confirmed coronavirus cases on shore to date, and the government has taken extensive public health measures to control the spread of the virus, including closing all schools nationwide. An additional 705 cases occurred aboard the cruise ship Diamond Princess, which was quarantined in Yokohama in February.

Luminous Cruising Co. is among the first firms to cite the impact of the coronavirus in a bankruptcy filing, but it is not the first cruise operator to see a negative impact from the outbreak. Royal Caribbean's stock has shed about 40 percent of its value from the start of this year; shares in Carnival Corporation and Norwegian Cruise Line are down by nearly the same percentage. Royal Caribbean informed investors last month that it could not predict the epidemic's effects on its full-year earnings.