Coronavirus: Saga suspends cruise operations and cautions on earnings

Saga said that while cancellations had increased in recent weeks, demand for cruises was very positive, with bookings of around 80 per cent of its sales target for the year. | Other 3rd Party

The travel and insurance specialist said the move follows updated advice from the UK government advising people aged 70 and over and those with pre-existing health conditions against going on cruises.

It said that while cancellations had increased in recent weeks, demand for cruises was “very positive”, with bookings of around 80 per cent of its sales target for the year. The company predominantly caters for over-50s.

The firm said cruise customers who were due to travel during the period will be offered a "full refund or credit for a future departure".

The announcement follows the decision by Carnival-owned Princess Cruises, which had two ships affected by the virus, to cancel all trips for its 18 vessels for the next two months.

Meanwhile, Sir Richard Branson announced that the inaugural season of his new Virgin Voyages cruise line was also being postponed due to the outbreak.

Saga has said it expects the suspension of its cruise operations for the next six weeks to reduce profit in the division by between £10 million and £15m.

The firm said that, while the travel environment is "uncertain", it has significant liquidity available, including a £100m credit facility, £33m of cash at the end of February and strong cash generation in its insurance business.

It said it does not expect the outbreak of coronavirus to impact the insurance arm, which has reported a "good start" to the current financial year.