Oasis of the Seas Returns to Service After Drydock Casualty
In a quarterly earnings call on Wednesday, Royal Caribbean executives said that the cruise ship Oasis of the Seas would be returning to service as planned on May 5 after undergoing repairs in Cadiz. She was damaged last month, but she was repaired quickly, and earnings were minimally affected.
On April 1, the Oasis suffered a casualty during a planned drydock period at Grand Bahama Shipyard. According to Royal Caribbean, an accident involving the drydock caused two construction cranes to collapse on the stern of the ship. "The damage to the ship was extensive and the ship had to go to a dock in Europe for repairs," the company said in an earnings statement Wednesday.
Due to the interruption in planned repairs and the unplanned damage caused by the casualty, three sailings departing Port Canaveral on April 7, 14 and 21 were canceled. Affected passengers received a full refund, a 100-percent credit towards a future cruise and a limited contribution towards airfare change fees.
The total impact of the casualty came to about $52 million ($0.25 per share) after insurance, according to Royal Caribbean, mostly driven by lost revenue. This only reduced the line's overall performance for Q1 by about 15 percent, and Royal Caribbean still beat analysts' expectations by a wide margin: All in, the firm reported earnings of $1.31 per share, or about $275 million.
Royal Caribbean is both a customer and an investor for Grand Bahama Shipyard. The cruise line estimates the net value of its investment in Grand Bahama at about $56 million, consisting of about $41 million in equity and a loan of about $15 million.