Carnival, Royal Caribbean and Norwegian Cruise Line Holdings posted strong earnings for their most recent quarters despite rising fuel prices. The companies are taking different approaches to fuel costs.
Carnival relies mainly on cutting fuel use. CEO Josh Weinstein told CNBC that "the best thing that we can do to control that cost is to use less." He said the company has cut its unit fuel consumption rate by 26% since 2019 and estimated it saved about $700 million in 2026 from that reduction. Carnival reported an all-time high net income of $1.9 billion for its most recent quarter. It spent $615 million on fuel in the third quarter, about 7.3% of revenue, and projects fuel costs of $640 million in the fourth quarter.
Royal Caribbean and Norwegian use hedging, a strategy of using derivatives to reduce exposure to fuel price swings. Royal Caribbean CEO Jason Liberty said the company is "a little bit over 60% hedged" for 2026, which he said is "helping insulate us from some of the impacts on the rising fuel costs." Royal Caribbean spent about $347 million on fuel in the third quarter, about 6.2% of revenue, and projects $379 million in the fourth quarter. Liberty said high fuel prices "evaporated a good chunk of our Q3 earnings beat into the full-year guide."
Norwegian has hedged approximately 48% of its 2026 fuel consumption, according to its earnings release. It spent about $196 million on fuel in the third quarter, about 6.6% of revenue. The company projects fuel consumption will rise slightly in the fourth quarter, to 255,000 metric tons from 239,000 metric tons in the third quarter.
Jefferies analyst David Katz told CNBC that companies hedge to manage fuel costs and Wall Street expectations. He said that while hedging is "mathematically most likely" more expensive over the long term, less fuel volatility can benefit a company's valuation.
Brent crude reached $116.72 per barrel on Friday, a six-month high, since the U.S.-Israel war with Iran began on Feb. 28, according to the report.