Cruise companies Carnival, Royal Caribbean and Norwegian Cruise Line Holdings posted strong recent quarterly earnings despite rising fuel prices. Their approaches to fuel costs differ sharply.
Royal Caribbean and Norwegian use hedging, which means using derivatives to reduce exposure to swings in fuel prices. Carnival CEO Josh Weinstein told CNBC that cutting fuel consumption is the best way to control fuel costs. He said, "At the end of the day, fuel is an input cost for us. The best thing that we can do to control that cost is to use less."
Carnival said it has cut its unit fuel consumption rate by 26% since 2019. Weinstein estimated the company has saved about $700 million in 2026 from that reduction. Carnival spent $615 million on fuel in its third quarter, about 7.3% of revenue, up from $425 million, or 6.7% of revenue, in the fourth quarter of 2025. Carnival projects fuel costs will reach $640 million in the fourth quarter.
Royal Caribbean CEO Jason Liberty said the company is "a little bit over 60% hedged" for 2026. He said the hedging is "helping insulate us from some of the impacts on the rising fuel costs." Royal Caribbean spent about $347 million on fuel in its third quarter, about 6.2% of revenue, and projects $379 million in the fourth quarter.
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.
Jefferies analyst David Katz said companies hedge mainly to manage fuel costs, and also to manage Wall Street expectations and limit stock volatility tied to fuel prices. He acknowledged that hedging is "mathematically most likely" more expensive over the long term.