Welcome to our business update conference call. I'm Arnold Donald, President and CEO of Carnival Corporation & plc. Today, I'm joined telephonically by our chairman, Micky Arison, as well as David Bernstein, our Chief Financial Officer, and Beth Roberts, Senior Vice President, Investor Relations. Thank you all for joining us this morning. Before I begin, please note that some of our remarks on this call will be forward-looking. Therefore, I must refer you to the cautionary statement in today's press release. For the past eight months, we have dealt with the unprecedented impact of COVID-19 on our business, and we have aggressively managed throughout.
In that time, we have come full circle from initiating a suspension in the early days of the pandemic to transitioning the fleet into pause status, rightsizing our organization, and now embarking on the phased resumption of guest operations, underway in two of our world-leading cruise brands, Costa in Italy and AIDA in Germany. We are very excited to resume guest operations across our brands, and we are working hard to do so in a way that serves the best interest of public health. Our highest responsibilities, and therefore our top priorities, are always compliance, environmental protection, and the health, safety, and well-being of our guests, the communities we touch, and our Carnival family, our team members shipboard and shoreside.
We are taking aggressive action, managing the balance sheet and reducing capacity to position us to weather this disruption and to emerge a leaner, more efficient company, reinforcing our industry-leading position. As a leisure company, we believe we are well-positioned within the travel sector. Because our industry is not reliant on business travel, we believe we will disproportionately benefit from the pent-up demand for vacation experiences as compared with many others in the travel sector. Historically, our company has demonstrated proven resilience through cycles. While business travel tends to shut down at times, vacationers tend to travel through those challenges. We've seen that time and again after events, for example, like the global financial crisis. We believe we will capitalize on this demand given our extensive and loyal past guest base. Historically, approximately two-thirds of our guests globally are repeat cruisers, a source of nearly 8 million guests annually.
Moreover, our internal data suggests, on average, a repeat guest returns every two plus years. Being in pause status for eight months, we have a backlog of past guests ready and waiting to cruise again. In addition, we have an active database of over 40 million to mine in the coming months as we strategically ramp up to our full resumption of operations. Our company is uniquely positioned for a phased resumption in cruise travel given our multiple national brands, which can each be restarted independently. As we said before, having national brands as a portion of our portfolio at this moment is clearly an asset. This has already proven to be instrumental in enabling us to resume cruising both in Italy for Costa Cruises, which is nearly 80% continental European sourced, and soon with AIDA, which is roughly 95% German sourced.
Our other brands like P&O U.K., which is 98% British sourced, P&O Australia, which is more than 99% Australian-New Zealand sourced, and Carnival Cruise Line, which is 92% U.S.-sourced, present further opportunity. Additionally, the fact that these brands are characterized by ready access with drive-to markets and a prevalence of shorter-duration cruises strengthens the potential for success in today's environment. Clearly, cruising in totality is not coming back all at once. As we are demonstrating with both Costa and AIDA, we intend to initially resume operations with a small percentage of the fleet, which naturally will make us less reliant on new-to-cruise. Moreover and importantly, the combination of the phased restart and the swift action we have taken to accelerate the exit of less efficient ships will reduce our capacity in the near term.
Having reduced total available capacity by 12%, we believe we will be less reliant on new-to-cruise even when we resume full operations globally. Never before have we been in this situation. In fact, in all prior cycles, we were actually growing capacity and needed to capture many more new-to-cruise. Now we have not only seen tremendous support for our brands from our loyal guests who really miss their cruise vacations and intend to return. It is also very encouraging to see demand from new guests. With virtually no marketing effort, our book position for the second half of next year is at the higher end of historical ranges, a compelling indication of the fundamental strength in demand for our brands. Upon resuming service, we believe we are well positioned to optimize that latent demand for our leading brands around the world.
Our strategic capacity reduction will also deliver a structurally lower cost base. Just by the fact that the 18 ships leaving the fleet are our less efficient ships, we will benefit by a 2% reduction in unit cost. Our efforts to right-size our shoreside operations will reduce our costs further, as well as our continued focus on finding efficiencies across our ship operations. Of course, over time, we will achieve an additional structural benefit to unit cost as we deliver new, larger, and more efficient ships. While we will emerge a smaller and leaner entity, we have retained the most cash-generating assets in our fleet, representing the lion's share, and in fact, substantially all of our 2019 operating income. All of the actions we have taken are in keeping with our primary financial objective going forward, to maximize cash generation.
As we return to full operations, our strong cash flow will be the primary driver to return to investment-grade credit over time and create greater shareholder value. The sale of less efficient ships will also result in less ongoing maintenance capital expenditures than we would otherwise have. At the same time, we've stretched out the delivery schedule, pushing out new build capital, and more importantly, we have just one ship on order in fiscal 2024 and just one ship on order in fiscal 2025. That will significantly reduce capital expenditures during those years, enabling us to pay down debt. As the industry leader, maintaining a strong balance sheet has historically been a key strength for our company and a differentiator for our shareholders.
Even now, we retain the lowest leverage in our industry and are opportunistically strengthening our balance sheet as we begin our return to service, which will position us well to create meaningful shareholder value over time. As you know, we took swift action to secure sufficient capital to provide a financial runway to withstand an extended pause in guest operations. Because of our strong balance sheet, we were able to raise the vast majority of that nearly $12 billion of capital on a secured basis, minimizing dilution. While it was certainly financially painful for a company that had always managed an investment-grade credit rating, bearing the cost of the capital raise was prudent to provide us the opportunity to create value over time.
While we have raised capital mainly through debt this year, given the recent momentum coming into the relaunch of our fleet, we saw a good opportunity to strengthen our capital structure through an equity raise, announcing a $1 billion at-the-market program to be completed over time. It's just one of the tools in our toolbox. We currently have the capacity to issue additional debt. We recently completed a convert flush, which opportunistically improved our balance sheet and our leverage. We also have the potential to monetize non-core assets to reduce the debt burden. Of course, cash generation upon returning to service will be the primary driver of de-leveraging over time. For several months, we've worked to develop new and enhanced protocols and procedures based on the best available science to specifically address the risks associated with COVID-19.
Now, while we've dealt with many types of viruses previously and have had effective protocols in place on board our ships, including screening measures, medical centers, and sanitation procedures, which prevent and reduce spread once brought on board from land, as evidenced by the global shutdown, this virus presents its own challenges. We have worked diligently and have engaged leading medical and science experts, including, among others, Dr. Vivek Murthy, MD, MBA, author, former vice admiral in the Public Health Service Commissioned Corps, and the 19th Surgeon General of the United States. Michael Diamond, MD, PhD, Herbert S. Gasser Professor of Medicine, Molecular Microbiology, Pathology, and Immunology, and Associate Director, Center for Human Immunology and Immunotherapy Programs, Washington University School of Medicine in St. Louis. Dr. Diamond was instrumental in developing a mouse model that is used extensively in the development of therapies and vaccines for COVID-19.
Michael Lin, MD, PhD, Associate Professor of Neurobiology, Bioengineering, and Chemical and Systems Biology, and Principal Investigator, the Lin Lab, Stanford University School of Medicine. Dr. Lin is one of the leading members of the Scientists to Stop COVID-19, a group of esteemed researchers, physicians, and Nobel Prize winners from across our country. Dr. Jewel Mullen, MD, MPH, Associate Dean for Health Equity, University of Texas at Austin Dell Medical School. Dr. Mullen is an internist, epidemiologist, public health physician leader, and the former Principal Deputy Assistant Secretary for Health in the U.S. Department of Health and Human Services. While at HHS, she also served as the Acting Assistant Secretary for Health and Acting Director of the National Vaccine Program Office.
These experts and others have and are helping to determine what enhancements to our existing protocols and operating procedures will best serve the interest of public health. They have informed our protocols and procedures, which are established based on the science, technology, medical treatment, data, and overall understanding of COVID-19 today. We expect these protocols to evolve as society's understanding of COVID-19 strengthens. Of course, our aspiration is to achieve less risk than exposure to similar shoreside activities. Our company and the cruise industry has a track record of doing just that with norovirus, for example. We are in active discussions around the world with appropriate authorities and agencies to resume guest operations when appropriate, including here in the U.S.
In each region, we will only sail when we feel we can honor our commitment to operate in the best interest of public health. When we sail, we will certainly fulfill each specific region's requirement. We have achieved a significant milestone. Our first brand to return to operations, as I've mentioned, was Costa in Italy. Costa has successfully completed the reintroduction of two ships, the Deliziosa and Diadema, and soon a third, the flagship Smeralda, will be underway. Each of Costa's ships are offering week-long cruises, departing from multiple different regional home ports and accessing a variety of different drive-to markets. For these initial voyages, we have chosen to sail with low occupancy levels, enabling us to gain valuable experience with our enhanced safety protocols. We received high satisfaction scores from our valued guests who have appreciated the changes that we've implemented.
In the coming days, we will mark another milestone as we embark our first ship from another of our brands, AIDA, carrying primarily German guests on cruises in the Mediterranean, and this will be followed by two more AIDA ships later this year. Again, we are very excited about the resumption of cruise in Europe, and we look forward to what we hope will be a phased resumption around the world. Throughout these challenging times, we have received tremendous support. Sincerely, thank you to our guests. Thank you to our dedicated members of the Carnival family, both shipboard and shoreside. Thank you to our trade partners, the travel agent professionals, and to our other stakeholders for their ongoing support. Especially thank you to our investors for their confidence in us and in our future.
In summary, we remain committed to continuing to deliver extraordinary vacation experience to our guests and value to our shareholders. By accelerating the sale of less efficient ships, we will emerge a leaner, more efficient company. We will capitalize on pent-up demand on reduced capacity and structurally lower our cost base while retaining our most cash-generating asset and opportunistically strengthening the balance sheet. By stretching out the delivery schedule and pausing new ship orders, we increase the opportunity to pay down debt. As we return to full operations, our strong cash flow will provide our path back to an investment-grade credit rating over time and create increasing shareholder value. With that, I will turn the call over to David.
Thank you, Arnold. It feels great to be transitioning into a new phase as we have successfully resumed some of our guest cruise operations. Our current financial action plan has three main paths: optimize the resumption of guest cruise operations, preserve cash, and opportunistically strengthen our balance sheet while improving our overall liquidity position. I'll start today with an update on our second half 2021 booking trends. I'll provide a summary of our monthly average cash burn rate and finish up with our third quarter cash flows, as well as some insights into our liquidity position. Turning to our second half 2021 booking trends.
At this point in time, our cumulative advanced bookings for the second half of 2021 are at the higher end of the historical range at prices that are down in the mid-single digits, including the negative yield impact of Future Cruise Credits, or more commonly known as FCCs and onboard credit supply. Directionally, if you exclude the negative impact of these two items, pricing would be in line with prior year. Our book position is very encouraging given that we had essentially suspended all advertising and promotional activities. It is particularly reassuring to see that approximately 60% of the bookings taken during the first three weeks of September were new bookings, with the remainder being FCC rebookings.
It is also promising to see that approximately 45% of the 2021 book position are guests that are new to brand, with the remaining 55% of guests being brand loyalists, which is just a little higher than the norm. Let's look at our monthly average cash burn rate. For the third quarter, our monthly average cash burn rate was $770 million, which was in line with our expectation. For the fourth quarter, we expected a monthly average rate to be approximately $530 million. This results in a monthly average rate of $650 million for the second half of 2020, as previously discussed on our last business update conference call.
The monthly average burn rate in the third quarter is higher than the fourth quarter expectation, driven by the timing of guest refund payments of over $1 billion flowing through accounts payable in the third quarter, partially offset by higher fourth quarter capital expenditures from two ship deliveries, one of which occurred last week, Enchanted Princess. Our $530 million fourth quarter monthly average cash burn rate includes four items. First, $250 million per month of ongoing ship operating and administrative expenses. Second, interest expense is expected to be approximately $120 million per month. Third, capital expenditures forecasted to be approximately $130 million per month, net of export credit financing, and this includes two ship deliveries and the receipt of other capital commitments contracted for prior to the pause in our guest operations.
The fourth and final component is other working capital changes, which are forecast to be approximately $30 million per month. Next, I'll provide a summary of our third quarter cash flows. We are currently in a solid liquidity position with $8.2 billion of cash on our balance sheet at the end of the third quarter. I'm happy to say that this is $1.3 billion more cash than we had on the balance sheet at the end of the second quarter. During the third quarter, we added to our liquidity position by completing three very well-received financing transactions with cumulative net proceeds of $4.7 billion. This was partially offset by three things. First, our total cash burn for the quarter was $2.3 billion, simply our monthly cash burn of $770 million per month times three. Second, $600 million, the majority of which was driven by scheduled debt maturities.
Third, the decline in customer deposits of a half a billion dollars from $2.9 billion at the end of the second quarter to $2.4 billion at the end of the third quarter, which was significantly less than the decline in the second quarter and was consistent with our previous expectations. Finally, some insights into our liquidity position. Since the pause in our guest cruise operations earlier this year, we have raised liquidity mainly through debt transactions. Given the recent momentum coming into the relaunch of our fleet, we saw this as a good opportunity to improve our capital structure through an equity raise. Three weeks ago, we announced an at-the-market equity offering program, more commonly called an ATM, for up to $1 billion. To date, we have sold 23 million shares for net proceeds of over $350 million.
With plenty of available liquidity in hand, our focus has now shifted. With Costa's resumption of guest cruise operations and AIDA's recent announcement of their resumption as well, we are looking at a variety of financial models where we resume guest operations in a phased manner, with specific brands and ships returning to service over time to provide our guests with enjoyable vacation experiences and our company with positive cash flow and additional liquidity. Now I'll turn the call back over to Arnold.
Thank you, David. Before we open it up to questions, I'd like to extend my personal deepest sympathy to those around the globe who have suffered directly themselves individually, or whose loved ones have suffered with the virus. Operator, please open the call to questions.
Thank you. If you like to ask your question please press the one followed by the four on your telephone. You will hear a three tone prompt taking out your request. If your question have been answered and you would like to withdraw your registration, please press the one followed by the three. One moment please for the first question. We have a question from Robin Farley with UBS. Please go ahead. Your line is open.
Great. Thank you. I have a question and also a small housekeeping item. Just the housekeeping item first. I wonder if you could just update, you didn't mention the U.K. commercial paper facility in your sort of liquidity arsenal. I'm just wondering if that is still available or if it's available but you're not intending to use it. Just to clarify that. Then my bigger question is, just given the success of the restart in Italy with yourselves and the other privately owned cruise line having no cases now going on two or three months of cruises, can you give a little bit of color around what kind of ramp-up in booking volumes you're seeing for that brand? Like in other words, have you seen that as weeks have gone by and multiple ships being in the market and kind of showing the success of all the protocols.
It would be helpful, I don't know if you can quantify in any way, but it would be great to kind of hear about what that has meant for demand. Thank you.
Hey. Good morning, Robin. It's good to hear your voice. First of all, with regards to the ramp-up in Europe, we're very pleased with the experience in Europe at this point, and are especially pleased that our guests are pleased with the experience in Europe. What those early sailings have been about, of course, is not occupancy or anything. We purposefully have the occupancy low as we get used to the new procedures and the protocols and we test to see how things are going. They have gone well. Again, the bookings generally, as we've talked about for the second half of 2021, have been strong. These close-in bookings that we have in Europe with limited itineraries wouldn't be a bellwether for anything, but we have seen some increased interest even in those.
I would say more broadly, then we'll answer your question about the commercial paper. I'll have David do that. I think more broadly, I know the question on everybody's mind, I'll just address it now. At this time, we have every reason to be optimistic that we will be sailing in the U.S. before the year-end. The reality is that the extension of the no-sail order was only 30 days. It goes out through October, which aligns with what the industry has voluntarily done on its own. We've got multiple testing regimens becoming more available and more readily available. We have the successful sailings to date, us and others in Europe, with the enhanced protocols and operating procedures we put there, as I mentioned, we've got the high guest satisfaction on those cruises. We've been collaborating here in the U.S. with all the various companies.
Everybody's been informed by global medical experts and scientists. Everybody's had their own bevy of these folks, and fortunately, the science is starting to align. We all got very similar recommendations, and the industry has been able to align around protocols and operating procedures that we will begin to look at, subject, of course, to approval from the various authorities that have to weigh in on all of this. We have, at this time, every reason to be optimistic that we will be sailing in the U.S. before year-end. With that, David, you want to respond on the commercial paper question? Thanks.
Sure. I do just want to add one other comment on Costa. I think Costa just resumed advertising a week ago with their call-to-action program. Keep that in mind, because early in the process, we were limiting occupancy. We do expect to see a different booking pattern as we go forward with the advertising. As far as the U.K. commercial paper program is concerned, we continue to have conversations with the U.K. We're in discussions with them to get this started again. Keep in mind, we're also working with Germany and Italy to complete those loans over the next couple of months as well.
Okay. Thank you. Also thank you for the commentary about the broader restart. I didn't know how much you would address it. Maybe just, I don't know if you'd add a clarification about, is it your belief in your conversations with the CDC that they're kind of embracing any of the guidelines that have been successful in Europe in a way that maybe wasn't reflected in the language of their extension statement? That's it.
I would say I wouldn't try to venture and interpret the CDC's receptivity for very specific protocols. What I will say is that the CDC, they've got a daunting task too, and so they're trying to mitigate the spread of this. I think that it's clear to them we are, as an industry, totally committed to doing that as well. Our highest responsibilities and our top priorities always are compliance, environmental protection, and the health, safety, and well-being of our guests, of the people and the places we go to, and of course, our crew and our shoreside personnel. We are totally committed as a company and as an industry to serving the best interests of public health. I do feel that what's going on in Europe has some influence.
What the scientists are saying has a tremendous amount of influence, all of the scientists. Of course, what we are putting forward as we work with them and with HHS and with the ports and the local authorities and so on and so forth everywhere, and the various destinations we have to go to, that plethora of people we have to engage with. I think that we have every reason at this time to be optimistic.
Thank you. Thanks.
Thank you.
Our next question is from Steve Wieczynski with Stifel. Please go ahead. Your line's open.
Hey, good morning, guys. Arnold, I want to follow on to the last piece about the potential to start operations here in North America by the end of the year. I guess I'm not sure the right way to ask this, but does the upcoming election change anything with you guys and the industry's ability to return eventually to service here in North America? If you guys are allowed to start sailing here before year-end, I guess the question is, what do you think customer demand would look like at this point, given we could be in the height of normal flu season, plus obviously all the overhangs from the COVID-19 scare?
I think on the first one, on the election, I think it's in everyone's best interest, no matter what your political leaning is, to have Americans working again, and then to have people go back to work and have livelihood and so on and so forth. I think, the election, if anything, obviously maybe lend some momentum to saying, "Hey, how can we work with this industry to make sure we get all those people that work in the ports back working again, the taxi drivers, all the people that are doing catering and providing provisions." I think there's momentum for that period because it's the right thing for the country, and it doesn't matter what political leaning people have. In that regard, it's an election year.
I'm sure everyone will want to stand up and say, "Hey, we helped bring back commerce and livelihood and means of quality of life for people." That would be my answer to that one then. Then the second question in terms of demand. Just keep in mind, as I said, we have pent-up demand from people who are very anxious to cruise. So we are not going to be able to bring all the ships back at once. The destinations are not going to all open at one time. So it's going to be a staggered restart. We're going to have limited capacity with pent-up demand, and I don't think demand is going to be a big issue in the short term.
If we were bringing all the ships back at once, where you have a heavy dependency on new-to-cruise, with no marketing, because nobody's marketed for the past several months, that could be a challenge. That is not going to be the case. We're not overly concerned about demand. We see the bookings. We see the number of new bookings, not just Future Cruise Credits from canceled cruises, and all those are real positive indicators. David, you want to add any comment? David, you may be on mute.
Yeah, sorry about that. Arnold, you broke up for a minute. I do apologize.
No, that's okay.
Yeah, I'm in a remote location, so yeah, I lost a number of the words there. I do apologize.
It's okay.
The only thing I would add, and I'm not sure if you had made this comment, was simply the fact that when Carnival Cruise Line announced their recent change, where they canceled some cruises in November and December, but kept in Miami and Port Canaveral a couple of cruises open, with the intention of restarting, as you said, before the end of the year. For a number of these, we did see a spike in bookings, which is just a demonstration of the demand that's out there, as you talked about the pent-up demand. With the phased resumption of cruising, we believe we'll be in fine shape as we move forward.
Thanks for that. Then my second question is a bigger picture question, but if we look out a couple of years down the road, are we incorrect to think that the cruise industry could be set up to be really in an outstanding position once the world goes back to a more normal environment? Yeah, I guess what I mean by that is with so much capacity being removed at this point, and the fact we probably aren't going to see a new build order for a couple of years, as we get out to 2024, 2025, 2026, the industry itself should be set up for its lowest capacity growth rate that it's probably going to witness for the last 20+ years. That should really allow you guys to push price. I hope all that makes sense. Would like to hear your thoughts there.
Arnold, I can't hear you.
Oh, I'm sorry. Thank you. I have it.
Yeah.
David, I got it.
Okay.
Thank you. I'm sorry. You're absolutely right. I was talking, but it was on mute because I was trying to minimize interference when you were talking, David. I heard a lot of breakup. In any event, you're absolutely right. It's conditions we've never experienced before. We've exited, or plan to exit 18 ships. That reduces, it helps our cost structure because they were less efficient ships, it reduces capacity. Yes, we're bringing on new ships. We just took delivery of Enchanted Princess, great delivery. As you know, as I pointed out, we only have one order in 2024 and one in 2025, we retain our cash-generative assets. The bottom line is there will be somewhat constrained capacity, dramatically constrained initially, over time, still constrained, because we would've gotten back for a while to where we were before.
Not a lot of new builds for us in the 2024, 2025 timeframe. Assets that are really cash generative, so we can generate cash and pay down debt and get back to the credit rating that we want to have and create shareholder value. Go ahead, David, if you wanted to make a comment.
Yeah, no, I completely agree. I think Steve said it very well. I think our future's very bright. If you think about it, and we said this on the last conference call as well, people love to cruise. The cruise vacation has the highest level of satisfaction of all vacation alternatives, and this is a temporary blip, and we will be back. We'll bring the ships back in a phased manner, the pent-up demand, and all of the other things that we're doing on board. I have great hopes that, as Steve indicated, over the next few years going out, the future looks very bright. That's why we made the comment that we also expect that over time, with the resumption of cruise operations, we will be able to pay down debt and rebuild back the balance sheet into a strong investment-grade balance sheet once again.
Okay, great. Thanks, guys. Really appreciate it.
Hey, thanks for your question. Appreciate it.
Our next question is from Felicia Hendrix with Barclays. Please go ahead. Your line's open.
Thank you. Good morning.
Good morning, Felicia.
Good morning. I never like to be the person to beat the dead horse, but I'll be that person right now. Look, regarding your optimism that the industry's going to be sailing before the year-end in the U.S., I agree, and I think a lot of the information kind of points or kind of supports your optimism. There is, I think, some nervousness among the investment community that the CDC could extend that date even further. Just wondering why you don't think that would be the case.
I think the CDC obviously could, and the issues there remain around what's happening overall with the pandemic and the rate of spread in the U.S., community spread. It'll be related also to the ongoing development and availability of various testing regimens. Obviously, rapid testing, low-cost rapid testing, would make life simpler for everyone, and we seem to be very much on the path to availability for that. There are a lot of things that could come into play, and of course, what's happening elsewhere in the world, which right now is positive, and we have no reason to believe it won't continue to be positive. We can't predict the future completely, but at this time, everything is pointing in the right direction.
We feel confident that we have protocols and operating procedures as demonstrated in Europe, which would be enhanced in many ways also here in the U.S. for the U.S. particular situation, which is still being resolved and worked out, that we'll be able to cruise where there is no greater risk to the activities that people engage on a cruise ship than they would on similar shoreside activities. As I said in my comments, and of course, our aspiration is that the risk is less than they would experience in similar activities shoreside. Why could that even possibly be? Well, it already exists. For example, with norovirus, about 6% of the U.S. land-based population experiences norovirus in a given year. That's the estimate.
There's something like 0.007% on a cruise ship, and the reason is because we have to deal with viruses and stuff all the time. MERS, SARS, Ebola, norovirus, Zika. We have medical facilities on board. We have medical screening. A lot of the things, hand washing and hand sanitizer, those things have been present on cruise ships for a long time. I think we're positioned well. We have to see. I can't guarantee, obviously, but we have every reason to be optimistic, and it's ultimately the right thing to do to get people back to work, to give people a chance for the vacation experience of a lifetime in a safe way relative to similar experiences they would engage in on land. Keep in mind, what we're doing in Europe is not happening anywhere else.
Hotels aren't doing universal testing of guests before they walk into a hotel. Airlines aren't doing universal testing of guests. Resorts aren't doing that. Amusement parks aren't doing that. They don't all have medical screenings before you participate. We're doing a lot of things that is not generally happening for the public as they move about. As long as people are moving about and engaging in activities, as long as there is some social gathering, then we're going to be in a good position to deliver the same risk or less risk than people engaging in activities on the shoreside. I hope that answered your question.
Yes. Thank you.
Thank you.
David, just kind of switching to you. We've gotten a lot of questions from investors about the initial rollout and that early transition period where you still will likely be burning cash. People are mainly wondering what the cash burn could look like in 2021, at least in early 2021. I was wondering if you could touch on that and also help us understand what kind of occupancy you need on a ship to cash flow breakeven. I know on the last call, we talked about 50%, is that a good benchmark to use? Do you think there'll be guidelines that prescribe occupancy levels, or will it be left to the operator?
Maybe kind of you could talk about what you're doing in Europe as a benchmark and just generally how you're thinking about the rollout from a cash flow perspective and how soon the ships can be profitable once you initiate the sailing. Thanks.
Sure. A whole bunch of questions in there. As I had mentioned in my notes, we are working through a large number of different financial scenarios, but it would be premature for me to give you guidance as to the cash burn in various scenarios, because there's a lot of uncertainty as to the ramp-up and exactly when each ship will start. I think it's fair to say, we've taken a look at, I gave you the fourth quarter, which was $530 million per month in the fourth quarter. In a no-revenue scenario, and I know we're not in a no-revenue scenario, but we did do some calculations. In a no-revenue scenario, the cash burn would probably be just slightly higher than that. In the first half of the year, we also have two ships being delivered just like the fourth quarter.
We do have a number of dry docks for various reasons, some regulatory, so the number in a no-revenue scenario would be slightly higher. We do expect over time, as we build the occupancy on Costa and AIDA and other brands, to begin to generate positive cash flow from those sailings and reduce that cash burn from something in the high fives down to a much smaller number, and hopefully over time, eventually turn positive. As far as occupancy is concerned, I think we've said this before, our intention is to start with occupancy on board our vessels below 50% to test the protocols, ensure that the guests are satisfied. As Arnold mentioned, the guests on Costa and the sailings have given us excellent guest satisfaction ratings. Over time, once we know we got things right, our intention is to increase the occupancy level.
Costa right now, in Italy and Germany, there is no occupancy limit. They are making sure that they have social distancing and will judge and increase the occupancy accordingly over time to ensure social distancing. As far as the breakeven is concerned, we've said this a number of times. The breakeven on the various ships is from somewhere between 30%-50% occupancy, depending on the size of the ship, and of course, the prices that we receive as well. I think that answers all the questions. Did I miss anything?
No. You got it. Just Costa, are you sailing below 50% now?
In the beginning, yes. We did say that we would start below 50% with Costa to practice the protocol and work our way up.
Where are you now?
We're below 50 and working our way up.
Okay. Sure. Okay. Thank you.
Thank you.
Our next question is from the line of Brandt Montour with JP Morgan. Please go ahead. Your line is open.
Hi. Good morning, everyone. Thanks for taking my question.
Good morning.
Good morning. I appreciate the color on pricing, and obviously, the adjusted pricing metrics you gave of flat year-over-year is very reassuring. To the extent that some of us might be seeing a little bit of dispersion under the surface for the industry overall, I was wondering if you could just comment on how you feel the state of the pricing integrity looking out to next year is holding up away from you and for the industry overall.
We would only comment on our own business, obviously, and I think you've heard that at this time, we're not experiencing any significant discounting or anything for our future bookings. That would be the comment I would share. David, I don't know if you had any other comments you wanted to make.
Yeah, no, I'd just reiterate that. I did indicate that the booking curve in the back half of the year was at the high end of the historical range. When you take into consideration, if you actually take out the FCCs and the onboard credits applied, we indicated that pricing was in line with the prior year. Pricing is very good, and I think that once we get back to cruising, as I indicated before, Carnival Cruise Line had seen good demand recently when they made their actions. I think once we get back to cruising, there's going to be an opportunity with all of the pent-up demand for us to take some positive price actions.
As Arnold talked about, the phased resumption of cruising, the limited capacity, and the high level of satisfaction that we've been able to achieve on the guest side with Costa, I think that all bodes well for us going forward in the future.
Excellent. Thank you for that.
I would just add that the certainty, and once we restart, the certainty of cruising. Right now, people are booking without that certainty, right? Once we ramp up our marketing efforts, which of course have been very quieted during this period, that will also lend greater support for good pricing going forward.
Got it. One more on that certainty, if I may. I apologize, I wanted to ask about the industry's recent commitment to 100% testing. Arnold, you mentioned that this was a factor or could be a factor with the CDC. I guess, what do your plans in the U.S. entail for testing specifically, what are the current issues and status around procurement there?
Yeah, I think several things. One, we're not sailing yet here in the U.S., the testing is continuing to evolve. Availability of testing is evolving. In many places in the U.S. now, there is access to PCR testing with turnaround times that would allow you to, within five days or less, take a test and be cleared in many cases free of charge and have that evidence from a certified lab that you are COVID-free, and be in a position then to show that you're in a category that we would allow to board a ship subject to additional screenings and so on. I think that's where it is today. Also, as you know, there's rapid tests that are very low cost.
When those will be available to the general public and how much remains to be seen, but that will all come clear over the next months coming here, more than likely before the end of the year. That would give additional capability. As you know, in Europe, we're doing a combination of PCR and antigen testing and so on. It's working out quite well. It's not a major barrier at this point for the testing for someone to consider cruising. It is an effective tool to minimize letting COVID on board from land. There's nothing that's going to preclude it completely. The other part of the protocols, of course, is what do you do when there are symptoms on board or there is even a confirmed case, so that you're not disrupting everyone else's cruise.
We've done great measures in that to mitigate spread with physical distancing. David's in the finance area, so he would say social distancing, but he's actually a pretty social guy. The rest of us in the cruise industry talk about physical distancing because cruise is all about social exchange. Physical distancing along with mask wearing and all the proper things you need to do if you're around a communicable disease. While at the same time, people are still having a good time and enjoying themselves and having a great vacation experience. We'll see how it evolves. There's so many different test regimens out there now, and we'll finalize as we get closer and, of course, be in compliance with every region because it's not just about leaving the U.S. You're going to go somewhere, and wherever you go, they're going to have their protocols.
We have to be compliant with everybody. That'll determine in the end the final makeup. The point is, there are more tools in the toolbox now. We've demonstrated an ability to execute universal testing in Europe, and we have every reason to believe that it is the right thing to do, but also is something that can be executed in the U.S. as well. Thank you for your question.
Thanks for those thoughts.
We have a question from Jamie Rollo with Morgan Stanley. Please go ahead. Your line's open.
Thank you. Yeah, it's just a question back on the U.S. return to service, please.
Yes, Jamie.
If that no-sail order does end later this month, is that enough of the green light for you to go ahead and cruise in Q4 in the U.S., or would you rather wait for formal approval by the CDC?
I'm sorry. I missed the first part. It was a little garbled. I'm sorry. Could you repeat your question?
Yeah.
Jamie?
If the CDC's no-sail order does definitely end later this month, is that enough of a green light for the company to go ahead and sail in Q4 in the U.S., or would you rather wait until you've got their formal approval? Clearly, their comments last week were still pretty cautious.
Yeah. I think, again, I don't want to try to interpret the rationale behind certain comments made by the CDC, but what I would simply say is we will only sail when we feel we are honoring serving the best interests of public health. We believe based on what the scientists, the advisors we've had, some of those I mentioned, there have been scientists with other companies. We've all collaborated, and medical experts. We believe that as we are in Europe, we have a way to go forward that will reduce the risk to no worse than if you were shoreside. We are optimistic and aspirational and believe we can get to less risk than what exists for similar activity shoreside. In that context, we feel we could sail and that we can handle issues that surface, any issues that surface on the ships.
If there is a no-sail order, de facto, that is approval. Okay? They may have advice or warnings for certain people with underlying conditions, which we would as well you know what I mean, et cetera. That is in effect saying you're free to sail. We'll see what happens. At this time, as I mentioned, we just have every reason to be optimistic that we will be able to sail both in the U.S. before the end of the year based on all the things we've shared. Thank you, Jamie.
Thank you. Then a sort of follow-up from that, if I may. As you say, in Europe, the protocols have been quite strict, particularly Costa. I think it's having testing of guests when they get to the ship. You mentioned the Healthy Sail protocols in the U.S., that might be five days before. Is there an issue with getting the testing equipment? Can you not replicate that in the U.S. and have the actual test for customers at the ship? It just seems a lot safer than having it five days in advance.
Well, actually, there are differing opinions amongst the scientists on whether you're better served 24 hours to five days before, or are you better served at embarkation. The point being, what we'll have, regardless where all that ends up, is universal testing, which doesn't really exist in the rest of society. That's the point. That there will be universal testing. There will be ways to follow on, if people have symptoms and so on onboard, so you can mitigate spread in the event that there's a risk of COVID on board or a known risk, or someone actually has COVID. Those are the important things. The details on at embarkation, 24, there's different opinions about all of that. Those opinions are really looking at different algorithms and models that project very small percentage differences. Obviously, we want to be the best we can possibly be.
All of those protocols, whichever way you go, whether you use a European one or you use one 24 hours before boarding, whichever one you use are better than what exists in society at large.
Great. Thank you very much.
Thank you.
Our next question is from James Hardiman with Wedbush Securities. Please go ahead. Your line's open.
Good morning. Thanks for taking my call. Just a clarification on the last conversation surrounding testing. Are you guys going to be bearing that cost, or is it the consumer? If it's you guys, should we be thinking about some material cost overhang as a result of testing all your customers?
I don't want to get in front of things we don't know yet because we have to do all of this, obviously, in full compliance with whatever the authorities involved say we need to do. I would say what exists today here in the U.S., a number of places you can be tested at no cost today with PCR testing. There are still avenues where people would pay for testing and so on. At some point, some of this, we'll determine where we are and when we're doing it. We want to make it responsible in the best interest of public health, and then as hassle-free and facilitated while being responsible for our guests. We're not taking a hard line on that. In any event, it's a cost that will be borne, and it will obviously go into the overall cost of a vacation experience.
In some cases, that cost may be zero, or it could be whatever the going rate for a PCR test is today, or with the different testing regimens that are coming along now. It could drop to very low cost, depending on what's available when. The Abbott test, for example, allegedly, I guess, is $5 or something like that. We'll see where we are. The most important thing is the commitment that we will do universal testing. Remember, early on, it's not going to be the entire fleet. It's going to be some ships going to some destinations with a lot of pent-up demand. It shouldn't be a major challenge to fill those ships, whatever the testing regimen ends up being.
Really helpful. With regards to the booking trends that you guys shared for the second half of next year, really encouraging. I'm trying to figure out how excited we should be getting about that. I guess as we look at the ramp in bookings, and I'm assuming it just doesn't immediately get there in July of next year. I'm assuming there's a meaningful ramp at some point in the first half. First of all, could you share with us sort of the timing of that ramp in bookings, and what does that tell you, if anything, about how consumers are thinking about the timetable with regards to a vaccine?
I'm assuming it's safe to say that there's people that are willing to go on a cruise ship right now, and then there's others who will be willing to go once the country is vaccinated to some degree, but may be less interested if they still have to wear a mask and do the testing and do the social distancing. Maybe just walk us through what the data says about how consumers are thinking about that recovery, and how you think about relaxing your protocols as the vaccine gets introduced next year.
Okay. There's a lot there, but I'll start at a high level, and then David can add some detail color. At the highest level, what I see in demand at this point in time. There's a lot of pent-up demand for cruise. People are booking. We canceled some cruises on Carnival the other day, and the cruises we had remaining in that timeframe, the bookings tripled. There's pent-up demand for cruising. That's point one. We have a huge previous cruise customer base, and they are comfortable on cruise ships. They understand the medical screening, the medical centers, the physical distancing capability on these large ships. They get it and they understand it. As I said, the guest experience. I'm hearing some background noise. If they could go on mute. The guest experience in Europe has been high. The satisfaction has been high.
Those are all positive indicators. We feel very good about the demand. Over time, as we get through all of next year and into the following year, as you get all the fleet back up and going and so on and so forth, we will again need to be convincing new-to-cruise people as we bring in additional capacity in future years. Although that capacity is going to be slowed, as we talked about before. We'll have to continue to do what we were doing before, which was convincing people who hadn't cruised to cruise. Now, keep in mind, pre-COVID, there were half a billion people globally taking vacations, taking holidays, and there were 30 million cruising. 30 million out of a half a billion. We have lots of opportunity for this industry. Our ships were sailing full, as they always do.
We are not overly concerned about demand now or through the first part of next year, okay, at this point in time. Just based on the dynamics of everything, the slow ramp-up, the pent-up demand, and so on. In terms of the vaccine, I want to go through just the general thoughts around the vaccine. Obviously, it's a psychological comfort for a lot of people that there will be a vaccine. Who knows exactly when they'll be available? Sometime, if not this year, next year, hopefully. How many people will take the vaccine? How effective will those vaccines be? All that's still in the air.
Clearly, the more tools, vaccines, therapies that mitigate the onset of symptoms that are really problematic for people and long-term effects for people who get COVID, therapies that address those things, there's continuing work on that, and there have been some, obviously, you heard about some in the news recently, that is available for people. Then the society's ability to be self-responsible in terms of paying attention and doing the basic things you need to do to make certain that you're minimizing the risk that you'll get the infection yourself. Washing your hands, not touching your face, wearing masks at appropriate times, physical distancing at appropriate times, all those things all bode for an environment where we'll be able to fill our ships as they come back on stream. That would be my comment. David?
Sure.
We probably have time for one more question. Yeah, go ahead, David.
Yeah, just a couple other quick things to add. I think it's fair to say that two-thirds of the FCCs are yet to be applied to bookings. I think people took the FCCs, and they're waiting to make their holiday plans. We've seen a number of instances, I mentioned before, where we saw a spike in bookings when people believed that we would start sailing again. I think if you look at our bookings, the uncertainty has caused the closer-in booking trends to be different than the further-out booking trends. When we look at the back half of next year, where people are much more confident that we'll be sailing, we're seeing good booking trends.
I think as we open up and we get approvals, as you mentioned before, and the uncertainty begins to go away, for all the reasons we previously stated, I think the booking trends will pick up, and we are very excited about that prospect. Plus, on top of that, Costa has shown that their safety and their protocols has afforded the guests an excellent holiday experience. I do believe over time, people around the world will see that with other brands of ours, and that will lead to additional cruise bookings as well.
Very helpful. Thanks, guys, and good luck.
We have a question from Assia Georgieva with Infinity Research. Please go ahead. Your line's open.
Good morning. Thank you for letting me speak. A couple of quick questions. After yous have done a pretty drastic and, I think, important reduction in capacity, is there the ability to possibly push ships' new builds further back into the future, sort of through a domino effect, so you're able to even further tweak years of somewhat higher capacity additions, such as the upcoming couple of years?
Assia, thank you for your question. There's been, obviously, a natural pushback in the scheduling as yards had to deal in their locales with community spread of COVID-19 and workers were not available to work in the yards for periods of time, etc . It's been a natural pushback. As I mentioned in my comments, we actually only have one new build for 2024 and one new build for 2025. That contrasts with three to four new builds across our nine Carnival Corporation cruise line brands that we were experiencing in recent years prior to the onset of the pandemic. There is that natural kind of delay and slowdown that you're referencing.
I think that combined with the fact that we've exited a number of less efficient ships, and we'll complete that process here over the next few months, puts us in a good capacity spot relative to the current dynamics. David, did you want to add anything?
Yeah. I'm sorry.
David, anything you wanted to add? You good? Okay, go ahead, then.
Yeah. Sorry about that.
I get-
I was on mute. No, I didn't have anything to add. I think you said it well.
Yeah. David, maybe for you, just a quick follow-up. Can you give us a range of the startup costs per ship, just so we know how to work with those over time as the resumption of service goes through the first months of 2021?
Sorry, can you repeat the first part of your question? I apologize.
Whether you can provide us with a range of the startup costs per ship as each ship restarts?
Oh
resumption of service?
Sure. As we bring ships back from pause, this is not that much different than a new ship entering service. We have to bring the crew back. We have to order food. Keep in mind that as you bring the ships back, meaning you've already announced the resumption of cruising, you're also going to see an uptick in the advanced ticket deposits. As a result of that advanced ticket deposits probably will pay for most, if not all, of any startup costs or any costs getting the ship back into service. Typically, with a new ship, it's tens of millions of dollars of negative working capital and advanced deposits before the ship enters service. There should be plenty of liquidity to handle that. These costs aren't all that significant.
Okay.
Okay. Thank you all.
Yeah. Since it's almost a quarter past the hour, I think we'll-
Yeah
go up for questions.
I was going to cut it off here, yeah.
Yeah.
Thank you, David. Hey, thank you, everyone. We really appreciate your continued interest, and just be assured, we are working hard as is the entire industry to resume sailing globally. We are definitely feeling good about the future prospect. Thank you very much.
That concludes the call for today. We thank you for your participation and ask you to please disconnect your line.