Lindblad Expeditions Holdings Inc. furloughed 130 employees on Friday and cut by at least 50% the workload of 55 employees.
The salaries of all remaining employees were cut 15-20%, and CEO Sven-Olof Lindblad will forgo all of his salary during the Covid-19 pandemic. The company said it will pay all health care benefits for those furloughed through at least Sept. 30.
Regulatory filings say the company had 350 onboard and about 290 full-time and 10 part-time shoreside employees. Lindblad’s base salary before a planned raise was listed as $515,000.
Earlier this month, the New York-based public company returned $6.6 million in federal aid as it chalked up a losing first quarter and held out hope for resuming some operations in the third quarter.
The key to cruising again is getting reliable and practical virus tests, “and we believe this will be possible in the near future,” Lindblad said when discussing third-quarter results early this month. They also have to convince passengers and crew that the vessels are safe. And they’ve made arrangements to charter planes to get people to the ships.
They have confidence the small size of their ships, which range from 48 to 148 passengers, and remote itineraries that need little shoreside support will help get them operating again. Four of the nine vessels in the Lindblad-owned fleet are U.S. flag.
“While it’s clear that we have a significantly longer runway than most in our industry,” they still began aggressively cutting costs, Lindblad said. They wanted to keep employees for as long as possible, so they got a $6.6 million Paycheck Protection Program (PPP) loan. “We fit all the defined criteria.”
But there was a lot of negative publicity about government loans going to public companies, so they returned the money hoping it would go to small travel-related firms.
“Our proactive steps to enhance our liquidity will allow us to operate into 2021 without any expeditions,” he said, acknowledging that they’re getting hard hit by the virus shutdown like everyone else.
They were off to a great start in 2020 before the coronavirus pandemic hit. At the end of February reservations for the year were up 25% over 2019, said CFO Craig Felenstein. Then 18 voyages were disrupted or cancelled. For the quarter, they lost $1.9 million on revenue of $81.2 million versus a profit of $14.7 million on revenue of $89.7 million the same period last year.
As of March 31, they had $137 million in unrestricted cash including $45 million drawn from available credit to deal with pandemic-related uncertainty. They’ve also reduced monthly cash burn to $10 million to $15 million instead of more than $30 million. They haven’t ruled out seeking additional financing from public and private markets through either equity or debt.
A majority of passengers whose trips were cancelled have opted for future travel credit rather than full refunds, and they still have substantial reservations on the books for the second half of this year. They had no Covid-19 cases among passengers or crew on any ships, Lindblad said.
“Clearly this pandemic is not going to last forever. Clearly people are going to want once again to travel,” he said. Their customers “want to live their lives …They won’t be held back.”
And if there are future outbreaks, he expects to test the crew and passengers, and have more medical remedies available. “Right now, we have no vaccine, we have no cure, and we have very, very limited testing.”