Saga suspends cruises over coronavirus

Saga has suspended its cruise operations until May 1 following the spread of coronavirus and warned that the move will knock its profits.

The travel and insurance specialist said the move follows updated advice from the 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% of its sales target for the year.

The company, which predominantly caters for over-50s, 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 £15 million.

The firm said that, while the travel environment is "uncertain", it has significant liquidity available, including a £100 million credit facility, £33 million 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.

Last week, Saga warned coronavirus had affected its travel business due to cancellations and falling demand.

It has been a testing start to life at the business for Euan Sutherland, who joined the company as chief executive from Superdry in January.