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Mitsubishi's losses on AIDA newbuildings mount close to $1.0 billion mark

Mitsubishi Heavy Industries, the Japanese shipbuilding group, says it will book a charge of JPY 39.8 billion in its first half financial year 2014 results, in addition to a JP Y61.4 billion charge that it had booked against the two ship order in its accounts for the previous financial year. In the US dollar terms, it means that the Japanese shipbuilder's losses in the project are approaching the $1.0 billion mark

"Under the circumstances, the scale of losses is now expected to significantly exceed the extraordinary loss that was booked to the company's consolidated financial results in FY2013. For this reason, the company has booked an extraordinary loss in the amount of 39,841 million yen in its consolidated financial results for 1H FY2014," Mitsubishi said. The financial year (FY) of Japanese companies runs from 1 April to 31 March in the following year.

Following the losses last year, the company in March 2014 set up a new project management structure and proceeded with construction. "In the course of confirming and pursuing the advanced specifications with the customer, however, reconsideration of the basic design concept was required for the overall layout of the ship's public areas, cabins and auxiliary facilities, causing a vast amount of design rework and a significant delay in the design schedule," Mitsubishi said.

"Although MHI had assigned additional design resources to the project and taken other measures, in the second quarter (2Q), the company was forced to revise the first ship's construction schedule due to a delay in completing the requisite drawings. Moreover, it has led to a delay on the second ship's work schedule. As a result, MHI expects further increase of costs due to design rework, rush work to make up for the delays, and procurement of additional materials resulted from the changes to the design specifications," the shipbuilder said.

Commenting on the earlier losses on the contract, the company said that as the work proceeded on the 124,500 gross ton ships difficulties in constructing the prototype became evident. "The volume of design work relating to cabins and other areas was vast beyond expectation, and significant design changes were made," the company said.

"The delay in the overall design work caused by these factors not only increased design costs but also made adverse impact on the construction schedule and need for additional material procurement. With this background, the company expected a substantial loss in the project and booked an extraordinary loss of 64,126 million yen in its consolidated financial results for FY2013," Mitsubishi pointed out.

Carnival group to introduce 10 times faster hybrid wireless Internet

Carnival Corporation & plc, the world’s largest cruise company, says it has unveiled the cruise industry’s first-of-its-kind hybrid wireless network – an enhanced high-speed service to eventually be rolled out to all 101 of its ships on all nine of its brands. "This technology innovation is expected to revolutionise how millions of its passengers stay in touch during their cruise and generate even greater interest in cruise vacations, especially among the tech-savvy millennial generation," the company said in a statement.

Carnival's backbone connectivity network, known as WiFi@Sea, will integrate a unique combination of strategically located land-based antennas installed along cruise routes, Wi-Fi from a port connection and advanced satellites, forming an innovative network that is a first in
the cruise industry on this scale. The “smart hybrid” network is designed to provide passengers and crew with faster and more stable internet access throughout their voyage – a feature becoming increasingly important to travelers of all ages looking to stay connected and share their
experiences through social media.

Once completed, the integrated network will seamlessly switch among its various technology solutions to give passengers the highest available bandwidth capacity and strength of signal. The network will be capable of providing Internet connectivity speeds that can be roughly 10 times
faster than those previously offered on Carnival group's ships.

Following the initial launch in North America in fourth quarter of this year for ships sailing in the Caribbean – the world’s most popular region for cruising – Carnival is scheduled to rollout the
technology globally. Under the current plan, the expansion will continue with
Alaska in summer of 2015 and will extend to the Mediterranean, Baltic, Western European and Asian regions in 2015 and 2016. The technology will eventually be available on all nine of the company’s leading global brands – AIDA Cruises, Carnival Cruise Lines, Costa Cruises, Cunard, Holland America Line, P&O Cruises UK, P&O Cruises Australia, Princess Cruises and


CMV acquires Grand Holiday and renames ship Magellan

Cruise & Maritime Voyages (CMV), the UK based cruise company, says it will take over Grand Holiday from Costa Crociere unit of Carnival Corp & plc group, and that the ship will start cruising from British ports next spring.

It will be re-named Magellan and at 46,052 gross tons will carry about 1,250 passengers becoming the proud new flagship of the CMV ocean fleet operating as an adult only (16 years plus) ship alongside Marco Polo (800 pax), Astor (600 pax) and Azores (550 pax). The ship was built in Denmark in 1985 as Holiday for Carnival Cruise Lines and it was refitted last in 2010, when it was in service with Iberocruceros, a Spain focused unit of Carnival Corp & plc group since closed down.

Chris Coates, Commercial Director commented, “We are delighted to have secured this excellent addition to our fleet which we believe will be very well suited to our core British market. The introduction of Magellan will increase UK capacity by 40% increasing carryings up to 74,000 passengers. Having already sold 65% of capacity for next year we remain confident that Magellan will help satisfy the growing demand for our product."

Christian Verhounig, CEO and Chairman of CMV explained, “The introduction of Magellan to our growing ocean fleet is another important milestone in the expansion and strategic development of the Group’s presence in the UK and wider international markets which will increase overall capacity to 115,000 passengers. The CMV brand is now creating much wider recognition and we remain confident that our medium to longer term growth objectives will be achieved."

Greater individuality among mega trends cruise ship designers have to focus on - Kulovaara

Mega trends that change the way how we live, work and spend our holidays will influence design cruise ships of the future, said Harri Kulovaara, EVP Maritime at Royal Caribbean Cruises Ltd (RCCL), the world's second largest cruise shipping company.

A mega trend towards greater individuality will be a major factor that designers of ships of the future will have to take into account. In practise, this will result e.g. in greater focus on learning and on health, he stated.

"When we design a ship today, we need to think ahead as it will have a life span of 30 years. Mega trends that affect personal needs and desires are very important in this respect. For example, boundaries between work and leisure time will be increasingly blurred in the future," Kulovaara told Cruise Business Online.

Meanwhile, Teijo Niemela, editor of Cruise Business Review, says that on its new Quantum of the Seas, the RCCL group's contemporary market unit Royal Caribbean International offers a package that allows a passenger to have one device constantly connected to the Internet for $160 for the duration of the entire eight night crossing from Southampton to Cape Liberty, New Jersey. The ship sailed from the UK port on Sunday.


NYK's cruise operations continue to improve results

The cruise shipping operations of Nippon Yusen Kaisha (NYK), the Japanese shipping giant, have continued to improve their performance in the first half of the company's financial year.

Recurring profit more than doubled to JPY2.5 billion in six months to 30 September from JPY1.1 billion in the same period a year earlier. Revenues increased to JPY26.1 billion from JPY24.0 billion

"The load factors and sales per customer improved year on year for both Crystal Cruises in North America and Asuka Cruises in Japan. As a result, sales increased and the segment logged higher revenues and profit compared with the same period of the previous year," the company said in a statement.

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