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Fred. Olsen Cruise Lines' losses continue to mount

Fred. Olsen Cruise Lines, the UK based destinational operator of four medium sized vessels, has reported a deeper net loss for both the second quarter and first half of the year compared to the same periods in 2013, according Bonheur ASA, one of the two listed companies of the Olsen family that jointly own the Ipswich based cruise line.

Net loss deepened to NOK56 million in the second quarter of 2014 from NOK42 million a year earlier, despite a rise in revenue to NOK377 million from NOK340 million. Operating result (EBITDA) became negative by NOK8 million compared to positive by NOK9 million a year earlier.

In the first half of 2014, the company booked a net loss of NOK102 million compared to NOK88 million in the same period last year, while revenues rose to NOK795 million from NOK726 million.

"The UK cruise market’s weak economic conditions continued to result in lower sales. The number of passenger days totalled 274 605 (316 468) for the quarter. Net ticket income per diem was 3% lower compared to the corresponding quarter last year. The average spot price of fuel oil in the quarter was 6% higher than in second quarter 2013," Bonheur said in a statement.

It did not comment on the outlook.

Norwegian orders two more Breakaway-Plus ships

Norwegian Cruise Line has reached an agreement with Meyer Werft GmbH of Germany to build two new Breakaway-Plus class cruise ships for delivery in the second quarter 2018 and the fourth quarter 2019. Each ship will be 164,600 gross tons and include 4,200 passenger berths.

"Norwegian Breakaway and Norwegian Getaway have proven themselves as industry game-changers and are extremely popular with our guests," said Kevin Sheehan, Norwegian Cruise Line’s chief executive officer. "It was only natural that we build on their success with this new ship order that further solidifies our long-term growth strategy."

The contract price for both ships is approximately 1.6 billion euros. The Company has export credit financing in place for each ship, arranged and underwritten by KfW IPEX-Bank GmbH of Germany.

"We are thrilled that Norwegian Cruise Line has the continued confidence in Meyer Werft to expand their fleet," said Bernard Meyer, managing partner of Meyer Werft.  "We are very proud of our longstanding relationship with Norwegian."

Norwegian Cruise Line pioneered the concept of Freestyle Cruising which offers guests the freedom and flexibility to enjoy their cruise vacation on their own terms, including multiple dining venues, relaxed attire, a variety of accommodations and world-class entertainment. The Company took Freestyle Cruising to the next level with the introduction of Norwegian Epic in June 2010 and subsequently launched two game-changing vessels, Norwegian Breakaway based in New York in May 2013 and Norwegian Getaway homeported in Miami in February 2014.  These ships incorporate groundbreaking design, including The Waterfront and 678 Ocean Place, a wide range of indoor and outdoor venues on three dynamic decks that create a whole new complex at sea and connect guests with the ocean.

Carnival Cruise Lines, Port of New Orleans agree to new five-year extension

The Port of New Orleans  and Carnival Cruise Lines signed a new agreement that will keep the world’s largest cruise line sailing at least two ships year-round from New Orleans through 2019.

The new agreement supersedes a 2013 three-year extension and offers three one-year options that could guarantee Carnival homeports at least two ships of equal or greater size than the Dream Class and Fantasy Class ships sailing from the Port today through 2022. The new agreement began July 1, 2014.

This is a clear demonstration of Carnival’s belief in New Orleans as one of its top home ports,” said Port President and CEO Gary LaGrange. “We look forward to helping Carnival grow its business in the Crescent City for the long-term.”

“Carnival is excited to continue our outstanding relationship with the Port of New Orleans,” said Gerry Cahill, president and CEO of Carnival Cruise Lines.  “We greatly value the professionalism of our partners at the port, the ease of operating from New Orleans and the tremendous support we receive from the local community and our valued travel agent partners. Our guests – particularly those from Louisiana - love cruising from the Crescent City and we look forward to continuing our New Orleans program for many years to come.”
“Taking a cruise from New Orleans means a vacation both here and abroad,” said Mark Romig, President and CEO of New Orleans Tourism Marketing Corporation, the city’s official leisure travel promotion agency. “Carnival Cruise Lines has been a great partner and the leisure travelers they bring enjoy two vacations as a result.”

Carnival currently has two home-ported cruise ships sailing year-round from the Port’s Erato Street Cruise Terminal which was recently renovated to accommodate the 3,646-passenger Carnival Dream. The Carnival Dream launched seven-day itineraries April 14 from New Orleans with eastern and western Caribbean cruises. The Carnival Dream joined the Carnival Elation, which sails four- and five-day cruises to Mexico. Together, these two ships carry more than 400,000 passengers annually from New Orleans – the most of any cruise line.

A study by Cruise Lines International Association (CLIA) found that spending by Carnival and other cruise operators in Louisiana tops $399 million, generating 7,548 jobs and $294 million in personal income. CLIA also ranked New Orleans the sixth largest cruise port in the U.S.

MSC Cruises plans to treble UK passengers to 200,000 by 2017, launches agent programme

MSC Cruises, the Geneva based cruise shipping company, says it has unveiled a new programme that will revolutionise the way it does business with travel agents in the UK as it plans to treble the number of passengers to 200,000 from the country by 2017.

The ‘Serving You’ initiative covers a whole host of trade-friendly measures designed to increase awareness of the cruise line, make it easier to work with and boost sales.

"The comprehensive package covers all areas of MSC Cruises’ relationship with retailers – including commission and marketing payments, improved account management, increased on-the-road sales support, clearer and better targeted promotional campaigns and new group and net-rate schemes," the company said in a statement.

MSC Cruises has also outlined details of comprehensive technological upgrades, including the launch of its new ‘MSC Book’ sales platform for agents, an updated fun and interactive online training programme and a high-tech telephone system at its UK call centre to reduce waiting time.

MSC Cruises executive director UK and Ireland Giles Hawke said “Our aim is to reach 200,000 UK passengers by 2017 – more than trebling our current level of business. We can only do that by engaging with agents and putting them at the heart of what we do. Our ‘Serving You’ programme represents a huge investment. There will be a bigger sales team managing our relationships to bring our brand closer to agents and give them all the help they need to sell. The focus is on developing stronger and deeper ties with the trade, and we have looked at every area of our business to do this.  We have made no secret of our desire to become a significant player in the UK cruise market – ‘Serving You’ signals our intent to make the trade our top priority."

Details of the ‘Serving You’ scheme were unveiled today at the inaugural meeting of MSC Cruises’ newly formed Travel Agent Advisory Board, which is made up of representatives from its key agent partners. Much of the groundwork was done from feedback received from agents at an informal meeting earlier in the year. The Travel Agent Advisory Board will meet up to four times a year as part of MSC Cruises’ efforts to strengthen its relationship with the trade.

The investment in ‘Serving You’ comes hot on the heels of MSC Cruises’ recently announced expansion. With four megaships on order, scheduled for delivery between 2017 and 2019, plus options for three more, MSC Cruises is investing more than any other cruise line in its hardware– a staggering €2.8 billion of confirmed orders, potentially rising to €5 billion.

Meanwhile, the ‘Renaissance Programme’ to lengthen and improve the four Lirica-class vessels begins in August. This will see another €200 million invested.

The MSC Cruises ‘Serving You’ programme in full

Account Management

-          For 2015 the MSC Cruises sales force in the UK and Ireland will DOUBLE in size

-          A 20-strong field sales team – MSC Ambassadors – will be deployed across the country to support key sales periods and campaigns

-          A restructured sales operation will ensure each sales channel has its own specialist team – maximising  returns for agents of all sizes

Management Information

-          MSC Cruises will share certain booking and sales data with key accounts, allowing agents to see how customers holiday and allow them to focus their marketing efforts


Experience Pricing

-          MSC Cruises rolls out its customised onboard experiences onboard from November, giving agent a sales option for all potential clients. With Bella, Fantastica, Aurea and MSC Yacht Club Experiences, there will be an MSC cruise to satisfy all budgets and customer types

Promotional Campaigns

-          MSC Cruises will support efforts to drive early bookings with a clearer promotional campaign structure. Best deals and upgrades will always be available for early bookers, making pricing easy to explain to customers

Commercial Agreements

-          Tailored commission payments and targeted marketing funds that meet the needs of all business models

-          Rewards for generating growth

-          Commission on MSC’s shore excursions

New Flights Programme

-          Dedicated charters from 2015, serving six Mediterranean ships from Genoa and Venice

-          Dynamic packaging flight system using GDS airlines to make MSC Cruises easier to sell

Investment in technology

-          Huge infrastructure improvements including the new and bespoke B2B booking system, MSC Book. The system is also a marketing resource, with downloadable collateral including adverts, flyers, images and video

-          Improved UK call centre telephone system sees calls routed to the relevant expert automatically

-          New e-learning programme, MSC Expert

Deployment Choice

-          Greater emphasis on MSC Cruises position as market leader in the Mediterranean – highlighting wide range of destinations, embarkation ports, itinerary choice and durations

Group Scheme

-          Secured space and lowest prices in return for commitment from retailers

Net Rates

-          New Net Rates partnerships available for 2015


Meyer Werft's STX Finland acquisition moves ahead, may win major order from Norwegian

Joseph L. Meyer Werft, the German shipbuilder that is a leading builder of cruise liners, and the Finnish government have made progress in talks to jointly acquire the STX Finland shipyard in Turku from its Korean owner, while Cruise Business understands Meyer is about to win an order for two very large ships from Norwegian Cruise Line.

"The buyer consortium has reached a preliminary understanding with the Korean seller about the principal terms of the acquisition. A number of questions, however, still remain open and these will have to be solved, including agreements with other stakeholders," Ministry of Employment and the Economy said in a statement. The shipyard in currently owned by STX Offshore & Shipbuilding, the South Korean company that put most of its overseas assets up for sale in late 2012.

"It is our mutual objective to make such progress in the matter by the end of next week so that further information could be provided then," the ministry said. The Finnish government plans to take a minority stake in STX Finland, which has a shipyard in Turku.

Cruise Business understands that Norwegian Cruise Line is close to placing an order for two 200,000 gross ton ships at Meyer Werft, which would be too large to be built at its yard in Papenburg in Germany. However, they could be built at the shipyard in Turku, which also built the first two 226,000 gross ton Oasis class ships of Royal Caribbean International, the contemporary market unit of Royal Caribbean Cruises Ltd (RCCL).

The German shipbuilder is also understood to be in talks for further two 150,000 gross ton ships for Star Cruises.