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Carnival Corporation sees 24% improvement in fuel efficiency from 2007 through 2014

Carnival Corporation & plc, the world’s largest cruise company, today released the results of its multi-year Fleet Fuel Conservation Program that by the end of 2014 will have saved more than one billion gallons of fuel and reduced fleet carbon emissions by 12 billion kilograms over a seven year period.

By the end of 2014, Carnival Corporation’s Fleet Fuel Conservation Program will have improved the fleet’s overall fuel efficiency by 24 percent compared to 2007, while saving approximately $2.5 billion in fuel costs, the company’s single biggest expense. Carnival Corporation announced the results of its fuel conservation efforts in conjunction with a National Press Club event celebrating world tourism today in Washington, D.C.

Carnival Corporation’s Fleet Fuel Conservation Program combines energy-saving programs onboard current ships with new energy-efficient ship designs to reduce energy consumption and boost fuel efficiency across its fleet of over 100 ships. The program has become a cornerstone of the corporation’s strategy to collaborate across its nine industry-leading brands and leverage its scale, while supporting sustainability initiatives designed to reduce environmental impact from maritime operations.

Since cruise ships generate their own electricity from fuel, Carnival set out to uncover every feasible way to reduce onboard energy usage and launched several key conservation initiatives since 2007 that have driven the success of the Fleet Fuel Conservation Program. These efforts include:

–         Propulsion: Improving how the ship moves through the water by optimizing ship speeds and cruise distances to design more fuel-efficient itineraries, significantly reducing energy and fuel consumption.

–         Hull coatings: Using new hull coatings and cleaning technologies to minimize the growth of marine organisms that create drag on the hull, which reduces the amount of fuel needed to move the ship through water.

–         Air conditioning: Installing new, energy-efficient A/C systems to help reduce the energy used to cool the ships, which is the second largest consumer of onboard energy after propulsion.

–         Lighting: Replacing traditional lighting with more efficient LED bulbs is an ongoing opportunity to save energy, as the company continues the process of replacing four million lights across the fleet.

–         Water production: While producing 73 percent of water used onboard its ships, Carnival is reducing the rate of onboard water usage and finding more efficient ways to produce water, including better use of engine heat to convert sea water to fresh water and installation of reverse osmosis systems.

–         Education & Training: Increasing onboard energy use awareness among officers, crew and guests.

–         Other initiatives: The company is pursuing additional energy-saving ideas for engine room cooling equipment, audio and entertainment systems, galley/cooking appliances and laundry services, and expanding the 20 percent of ships equipped for “cold ironing” as more ports offer the ability to connect to shore electrical power. Carnival also continues to develop its ability to use alternative fuels.

New ship builds also drive significant improvements in fleet fuel efficiency through energy-saving innovations that are designed directly into the new vessels. By adding over 30 new ships to its fleet since 2007, Carnival Corporation has capitalized on the latest advances in energy efficiency, including building larger ships with highly efficient propulsion systems that incorporate new computer-modeled hull designs and the latest in fuel-efficient propeller and engine combinations.

“We have made great strides in working together to reduce energy and fuel consumption across our fleet, which is a top priority for us as a company,” said Arnold Donald, CEO of Carnival Corporation. “We are very proud of our conservation efforts, but we also realize that doing our part to reduce carbon emissions and help protect the environment is a job that is never complete. We’re committed to building on the momentum of our sustainability initiatives because it is the right thing to do for the environment and our fellow citizens, the passengers and crew on our ships, the communities we visit, and also for our business.”

Expanding Environmental Efforts Across Nine Global Cruise Brands

Carnival Corporation’s Fleet Fuel Conservation Program is part of its deep-rooted commitment to protect the natural environments in which it operates, while also reducing emissions from its ships and improving air quality. The company’s more than 100,000 employees drive this commitment to preserve the oceans and seas that provide livelihoods and enjoyment for millions of people around the world.

Fuel conservation is Carnival’s top environmental priority and the company is expected to increase fuel efficiency by five percent in 2014 alone. Driven largely by its energy and fuel conservation efforts, Carnival is now in a position to exceed its goal of a 20 percent reduction in carbon emissions by 2015.

Carnival Corporation is investing as much as $400 million to design, build and install an industry-first exhaust gas cleaning technology, called ECO-EGC™, to more than 70 percent of its fleet. The system uses filters and seawater to remove pollutants from exhaust gases, significantly advancing cleaner air quality for oceangoing vessels.

In addition to these efforts, the company continues to focus on additional environmental initiatives, including using effective waste management, employing on-board environmental officers on every ship and partnering with environmental organizations such as The Nature Conservancy to support protection of the global marine environment.

These efforts by Carnival Corporation paired with efforts from other parties in the maritime industry have had an impact on environmental preservation. According to the Secretary General of the International Chamber of Shipping, there has been a 20 percent reduction in greenhouse gas emissions for the entire global maritime transportation industry from 2007 to 2012. Carnival is also a member of the Sustainable Shipping Initiative whose main goal is to promote sustainability within the global maritime industry.

“The Three Cs”: Strategic Initiative to Leverage Carnival Corporation’s Industry-leading Scale

The Fleet Fuel Conservation Program has served as a model for Carnival Corporation’s strategy to work closely together across its nine brands through collaboration, cooperation and communication – known internally as “the Three Cs” – to improve guest experiences, strengthen brands, boost operational efficiency, reduce expenses and generate new sources of revenue.

Throughout 2014, Carnival Corporation has accelerated this collaborative approach to better leverage its scale as the world’s largest cruise company. The company’s extensive working-together program across its brands is designed over the longer term to generate significant cost-savings and revenue while improving quality and providing vacations that consistently exceed guest expectations. This effort embodies and helps actualize the sustainability values embedded in Carnival Corporation’s Health, Environment, Safety and Security Policy. 

Saga reports strong improvement in cruise sector

Saga, the British lifestyle company that focuses on customers over the age of 50, has reported a strong improvement in the profitability of its two ship cruise operations in six months to July, year on.

Revenue rose to £43.3 million from £38.1 million in the same period last year, while gross profit increased to £8.6 million from £4.5 million. Operating margin improved to 5.2% from 1.6%.

“Total passenger days in the Cruising business were up 13,000 (8.1%) through improved load factors on both of Saga's ships.  Together with improved per diem yields and higher on-board revenues, this resulted in a £5.2 million (13.6%) increase in revenue from the Cruising business,” the company said in a statement.

“In the Cruising business, we have extended the Saga brand into Third Party Cruising, through agreements with four separate cruise lines. Initial demand for this product has been strong and, encouragingly, 30% of the demand has originated from new customers - those that have not booked a cruise or holiday with us before - with a further 19% of the demand from people who have not holidayed or cruised with us for over 3 years,” Saga said.

The company owns the 37,000 gross ton Saga Sapphire and 19,000 gross ton Saga Ruby II, both of which were built in Germany in 1981.

UPDATED: Pacific Aria and Pacific Eden to receive huge revamp before Australia debut

Pacific Aria and Pacific Eden, the two ships P&O Cruises Australia will introduce in November 2015, will assume a completely different identity to their present Holland America Line ones in a major refit. Tillberg Design in Sweden has been resposible for designing the new interiors of the two ships that were built in the early 1990s as Statandam and Ryndam.

They will feature residential feel on outer decks, boutique winery experience and culinary school, a report in Herald Sun says.

Instead of the traditional buffet, the ships will feature an area known as The Pantry including a variety of food outlets from a gourmet deli to fresh fish and chips.

P&O Cruises senior vice president Tammy Marshall said the concept would take dining at sea into new waters. “It will be a haven for food lovers, offering a contemporary relaxed vibe as guests indulge and discover what’s in The Pantry,” Marshall said.

A total of 15 bars and restaurants will be on board the ships including Dragon Lady serving Pan-Asian cuisine and Angelo’s Italian restaurant named after photographer Angelo Frontoni.

Guests will also be able to learn to cook some of the dishes on offer, at the ship’s Open Kitchen with a culinary school and dedicated Chef’s Table dining area.

A new Cellar Door will provide guests with a boutique winery experience, and celebrity chef Luke Mangan’s popular Salt Grill will become the Salt Grill Bar on the Pacific Aria and Eden.

Marshall said the new look and feel of the ships would extend to the pool area, with day beds, sheer white curtains and outdoor rugs and lamps providing a luxury residential feel and a great setting for entertainment day or night, the report stated.

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Pacific Aria and Pacific Eden, the two cruise ships Carnival Corp & plc group unit P&O Cruises Australia will receive from sister company Holland America Line, will undergo a massive revamp that will significantly change the ambiance of the ships before they enter service on the Australia market in November 2015.

The ships, currently known as Statendam and Ryndam, will rase the British flag before entry into service with the Australian company.

The buffet on both ships will be replaced by The Pantry, which offers interactive dining like "you’ve never seen it before.," the company saod, calling it a foodie haven. "A range of stylish, individual outlets offer contemporary Australian and international cuisine like fine cheeses and Mexican street food,” the company said in a statement.

“Enjoy the café vibe as you relax at an intimate table for two or join friends at the high tables and communal benches. Night or day, there’s something for everyone in The Pantry, making it the perfect venue for a quick bite, long lunch or romantic open-air dinner.”

The Waterfront restaurant will occupy the lower level of the current two deck high main dining room.  “Enjoy classic and cutting-edge Australian cuisine in a plush, modern surrounding. Materials and a colour scheme inspired by natural Australia sees wooden details and soft colours throughout,” the company said.

Dragon Lady, an Asian fusion restaurant, will occupy the port side of the upper level of the former main dining room, while an Italian restaurant will be introduced in the starboard side of the same space. Salt Grill by Luke Magnan, a feature that has already been introduced ion the other three ships of the company, will be located forward of the Italian restaurant.

“Guests onboard Pacific Aria and Pacific Eden can choose from two separate pool areas - the adults-retreat The Oasis and the main pool deck. And this is not your regular cruise ship pool area. With understated décor in a grand yet relaxed setting, the design brings the indoors, outdoors, creating the perfect place for daytime relaxing and night time cocktails.” P&O Cruises Australia said.

In all, there will be 15 bars, restaurants and cafes on the early 1990s built ships that are of 55,000 gross tons each.

CBR Odo Commentary - China and Costa brightest spots in Carnival interims

Carnival Corp & plc, the Anglo American cruise shipping group that is the largest company in the business, earlier this week reported strong third quarter financial year 2013-14 interims.

Group President and Chief Executive Officer Arnold Donald said in a statement: “Strong close-in demand and higher onboard spending helped drive significantly better than expected third quarter results and 15 percent year-over-year earnings improvement.”

“Our Asia operations performed particularly well during the quarter, driven by a double-digit yield increase in our China program, further solidifying our industry leading presence in this important emerging cruise market. “

“Our continental European operations also enjoyed strong yield and profit improvement in the quarter, reflecting continued progress for the Costa brand.”

“In addition, our summer Caribbean product successfully attracted nearly 20 percent more guests than the prior year, reinforcing the popularity of the world’s largest cruising region,” Donald added. 

In our opinion, the continued recovery of the Costa Crociere brand from the aftermath of the sinking of Costa Concordia in 2012 is particularly encouraging, given the challenging business environment in Continental Europe, which is a key source market for the company.

Donald’s upbeat comments regarding China, where Costa also operates, produced the second very encouraging news. The continued growth of the Chinese market is very important not only for the Carnival group, but also for Royal Caribbean Cruises Limited (RCCL), the industry’s number two and also Star Cruises whose home market is in the Far East.

This is good news also for MSC Cruises and Norwegian Cruise Line. As Genting Hong Kong group that owns Star cruises on which it wants to concentrate its cruise operations, continues to reduce its stake in Norwegian, we think the rapidly expanding Norwegian brand will also want to gain foothold in China in the future. The recent acquisition of Prestige Cruise Holdings paves the way for such a move.

Carnival Corporation COO Alan Buckelew to relocate to China

Carnival Corporation & plc, the world's largest cruise company, yesterday announced Alan Buckelew, Chief Operations Officer, will be expanding his leadership role by relocating to China to more closely oversee the company's growing operations in the country.

"As the world's largest cruise company with a portfolio of nine industry-leading global cruise lines, we are the clear market leader in China and very well positioned to continue working with officials in China to help the country meet its goal of becoming one of the most important cruise markets in the world," said Arnold Donald, CEO of Carnival Corporation & plc.  "Today's announcement underscores our deep commitment to China as a market of great strategic importance for our company. Alan is one of the most respected leaders in the industry and having him on the ground in China will add great strength to our operation and growth opportunities in China."

Buckelew's experience in Asia is extensive, previously serving as the CEO of Princess Cruises before taking on the assignment of Chief Operations Officer for Carnival Corporation & plc.  In his expanded role, he will lead all of the company's initiatives in China, while also continuing to provide oversight of all maritime and port operations around the world and a number of related functions as part of his COO role.

"We are excited about our cruise ships currently serving the Chinese market and the vast potential to grow our business in China in the months and years to come," Buckelew said. "Our team in China is dedicated and passionate about delivering a unique experience designed to exceed the expectations of every guest who boards one of our ships."

This past May, the company announced Costa Serena will deploy year-round in China next year, making Carnival Corporation the first global cruise company with four ships based in China, one of the world's fastest-growing cruise markets. Costa Cruises plans to debut Costa Serena in Shanghai in April 2015, where it will join Costa Victoria and Costa Atlantica, other Costa ships already deployed in China. The move will increase Costa's overall capacity in Asia by 74 percent.

In addition to Costa Serena, Princess Cruises – another iconic Carnival Corporation brand – began home-porting the Sapphire Princess out of Shanghai this past summer.

Adding a third ship based in China this year increases Carnival Corporation's total 2014 capacity in the country by 66 percent. In 2015, with four ships based in China for the first time, Carnival's industry-leading capacity is expected to jump 140 percent over a two-year period.

"As we execute our strategy to accelerate growth in China, we have the benefit of eight years of experience in China to not only help guide our expansion, but also find unique ways to delight our guests with the joy of cruising," Buckelew said.

With a career spanning more than 37 years in the cruise industry, Buckelew served as chief executive officer of Princess Cruises from June 2007 and served as the line's president since February 2004. In addition, he also served as chief operating officer for Cunard Line from 2004 to 2007.

Buckelew has a breadth of experience across cruise operations, having served as executive vice president responsible for Princess's strategic planning, marketing and yield management services. Before that, he held various other high-level executive positions in customer service, shared services and yield management. He also held roles as chief information officer and chief financial officer of Princess.

Buckelew served in US Army in 1969 and 1970. He holds an MBA and bachelor's degree from the University of California at Los Angeles.

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