Cruise operators register strong earnings despite high fuel prices

The world’s leading cruise operators are reporting strong earnings despite rising fuel prices, but Carnival, Royal Caribbean and Norwegian Cruise Line are taking different approaches to managing the additional costs.

Oil prices have climbed since the US-Israel war with Iran began on 28 February. Brent crude reached a six-month high of $116.72 a barrel last Friday, increasing pressure on companies that depend heavily on fuel to operate their fleets.

Royal Caribbean and Norwegian use hedging strategies, which involve financial contracts designed to reduce exposure to future price fluctuations. Royal Caribbean chief executive Jason Liberty said the company had hedged slightly more than 60% of its expected fuel requirements for 2026, helping limit the impact of rising prices.

Norwegian Cruise Line Holdings has hedged approximately 48% of its fuel consumption for the year.

Carnival, however, argues that reducing consumption is a more effective long-term response. Chief executive Josh Weinstein said the company had cut its fuel consumption per unit by 26% since 2019. Carnival estimates these efficiency improvements will save it around $700 million in 2026.

The company reported record net income of $1.9 billion in its latest quarter, beating analysts’ expectations. It spent $615 million on fuel during the period, equivalent to 7.3% of revenue, and expects fuel costs to rise to $640 million in the fourth quarter.

Royal Caribbean spent approximately $347 million on fuel in the third quarter and expects the figure to increase to $379 million in the next quarter. Norwegian reported third-quarter revenue of $2.9 billion and adjusted earnings per share of $1.12.

Despite the higher costs, Royal Caribbean said demand for holidays remained strong, with bookings for 2027 already up by a high-teens percentage.

All three companies expect fuel-related pressures to persist into the final quarter, leaving cost control central to maintaining profitability.