Here’s why Norwegian Cruise Line is taking Florida to court

Ahead of its first U.S. Voyage after more than a year of restrictions due to the Coronavirus pandemic, Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) is taking Florida to court for its law that bans cruise companies from mandating vaccines for their guests.

Florida says its law protects civil liberties

Governor Ros DeSantis of Florida says the law is to protect civil liberties. While state lawyers fixate on how other cruise lines were able to resume operations with COVID testing without making vaccination a requirement, Norwegian told CNBC in a statement last month:

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“We believe Florida’s prohibition is on the wrong side of federal law, public health, science and is not in the best interest of the welfare of our guests.”

The Miami-headquartered cruise line is challenging the law at the federal court in the Southern District of Florida, but governor DeSantis wants to settle the battle in the State court instead. Norwegian’s Encore is scheduled to sail from Seattle to Alaska on Saturday.

The news comes weeks after Canada allowed cruise ships to return to its waters in November.

Norwegian’s Q2 financial performance

Also on Friday, Norwegian reported narrower than expected per-share loss for the fiscal second quarter, but its revenue came in sharply lower than estimates.

According to Refinitiv, experts had forecast the cruise line to post $10 million of revenue for Q2 and $1.97 of per-share loss. In comparison, Norwegian registered only $4.37 million of quarterly revenue but lost $1.93 per share.

The NYSE-listed company warned it will continue to lose money in the upcoming quarters until it resumes regular voyages. It, however, expressed confidence for 2022, booking for which were ahead of the record levels seen before the pandemic in 2019, Norwegian said in its earnings release.

Norwegian valued advance ticket sales at the end of Q2 at $1.4 billion, including $800 million from future cruise credits. The cruise company burned $200 million per month on average in the recent quarter. Shares of the company are largely unbothered on Friday morning.