Norwegian Cuts 2026 Outlook as Fuel Costs Sink Cruise Momentum

Norwegian Cruise Line Holdings lowered its 2026 earnings forecast, even after reporting a better first quarter. The company now expects adjusted earnings of $1.45 to $1.79 per share, down from its earlier forecast of $2.38 per share.

It also expects net yield to fall 3 percent to 5 percent this year. Net yield measures how much revenue a cruise line earns per passenger cruise day, so a decline means Norwegian expects weaker pricing, lower onboard spending, or both.

The first quarter itself was not weak. Revenue rose 10 percent to $2.3 billion, and Norwegian returned to profit with net income of about $105 million. A year earlier, it had posted a loss. Occupancy also improved, showing that the company filled more of its available capacity.

Higher fuel costs are hitting cruise profits

Fuel is now the biggest pressure point. Norwegian expects to pay $782 per metric ton for fuel this year, net of hedges. Its earlier estimate was $670. Hedges help companies lock in part of their fuel costs in advance, but they do not fully protect cruise lines when prices rise sharply.

The increase is linked to the Middle East conflict, which has pushed global oil prices above $100 per barrel.

Europe demand is becoming a bigger concern

Norwegian is also seeing weaker demand for European cruises, especially for close-in bookings. These are trips booked near the departure date.

Europe is a major part of Norwegian’s summer schedule. The region represents 26 percent of its second-quarter deployment and 38 percent of its third-quarter deployment. Norwegian is also more exposed because many of its European cruise passengers come from the US. For those travelers, a Europe cruise usually requires long-haul flights, which makes the trip more expensive and easier to postpone when geopolitical risks rise.

Cost cuts are now central to the recovery

Norwegian is trying to protect margins through cost reductions. The company said its efficiency plan should generate about $125 million in annual run-rate savings. Norwegian is reducing some shoreside roles and expects salary and benefit costs to fall by 15 percent in 2026.

Norwegian’s warning also fits a wider pattern across travel companies exposed to the Middle East crisis. TUI cut its 2026 profit guidance after the Iran war added about $47 million in costs, disrupted cruises and holidays, and made some customers more cautious about trips in the Middle East and eastern Mediterranean.

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