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Costa Asia marks first to make the 10th anniversary in China

  • Written by Teijo Niemelä

Costa Asia celebrated in Shanghai its 10th anniversary on July 1 by inviting industry partners and staff representatives to witness Costa Asia become the first international cruise company to reach the 10th anniversary milestone in China. The 2,000,000th passenger also attended the celebration as the guest of honor and was awarded with a free ticket for a Costa Cruises vacation.

Since its maiden China voyage in July 2006, Costa Asia has achieved a number of industry firsts. It was the first large international cruise company authorized to operate and deploy home ports in China. Over the past decade, Costa Asia has maintained customer-first principles and focused on innovation and excellence to bring Chinese passengers the most creative and high-quality cruise products, all with the flavor of “Italy at Sea”.

So far, Costa Asia has served 2 million passengers in the China and Asia markets. According to China Cruise & Yacht Industry Association statistics, in 2015, China had over 1.1 million cruise visitors, and Costa Asia was recognized with the most voyages and passengers, consolidating its leading position in China with a 38.31 percent market share.

From its earlier deployment of Costa Allegra (2006), Costa Classica (2009) and Costa Romantica (2010), to the more recent Costa Victoria “The Ship of Fashion” (2012), Costa Atlantica “The Ship of Art” (2013), Costa Serena “Rome at Sea” (2015) and Costa Fortuna “Museum at Sea” in April 2016, Costa Asia brings its “Italy at Sea” flavor to Chinese passengers, offering them an authentic European cruising experience.

“Over the past decade, we have invested in the China cruise market to bring passengers the flavor of ‘Italy at Sea’. We wish to express our gratitude to local communities for their consistent support.” said Buhdy Bok, Costa Asia President. “We would also like to thank all of our staff for their dedication and the invaluable contributions they have made to the company and its passengers,” Bok concluded.

Costa Asia’s fleet will welcome the arrival of Costa neoRomantica in 2017 and add two 4,200 berth new-builds specifically designed for the China market, coming in 2019 and 2020. In addition, AIDA Cruises, a leading German cruise brand, will also join Costa Asia in 2017 by stationing a ship in China year-round for the first time, home-ported in Shanghai for the China market.

Costa Asia has shown its commitment to the China cruise industry by increasing the number of Chinese onboard staff and collaborating with local institutes to attract and train local talent for the best tailor-made cruising experience for Chinese passengers. Costa Asia has so far employed a total of 2,700 Chinese staff aboard its fleet. Based on the successes the group has achieved, the cruise liner plans to increase the number of Chinese staff aboard to 50 percent by 2020 and create more career opportunities for the China cruise industry.

Fincantieri to set up a joint venture in China

  • Written by Teijo Niemelä

Fincantieri, world leader in cruise shipbuilding, and China State Shipbuilding Corporation (CSSC), China’s largest shipbuilding conglomerate, have signed an agreement for the constitution of a joint venture aimed at developing and supporting the growth of the Chinese cruise industry. This step allows Fincantieri to gain a leading role monitoring a strategic market with high potential.

The signing took place today in Shanghai between the CEO of Fincantieri, Giuseppe Bono, the President of CSSC, Wu Qiang, and the Chairman of CSSC Cruise Technology Development and of the Shanghai Waigaoqiao Shipbuilding facility (SWS), Wang Qi.

Attending the ceremony were Ambassador of Italy to the People's Republic of China Ettore Sequi, Consul General of Italy in Shanghai Stefano Beltrame, Chinese Vice Minister of Industry and Information Technology Xin Guobin, Vice Mayor of Shanghai Zhao Wen, for Carnival Corporation the Chief Operations Officer of Carnival Asia Michael Ungerer, and many authorities from the Chinese Government and the municipality of Shanghai.

The today’s agreement, which follows the historic ones signed with CSSC and Carnival Corporation in November 2014, provides that the joint venture will design and sell cruise ships exclusively intended and specifically customized for the Chinese and Asian market. These vessels will be built at one of CSSC’s shipyards, the SWS facility, on the basis of a technological platform licensed to the joint venture and to the SWS shipyard by Fincantieri, which will therefore perform the activities within its competence through the joint venture.

In order to ensure the success of the cooperation and to benefit from Fincantieri’s global experience and expertise in the development and construction of cruise ships, the agreement envisages that Fincantieri will also provide specialized consultancy services and supply certain key components of the vessels to the joint venture and to SWS.

According to the Chinese Ministry of Transport (MOT) the cruise market in China expanded significantly in the last years, reaching 1 million passengers in 2015. The growth potentials are estimated in 4.5 million passengers by 2020, projecting China to become the world’s second largest cruise market after the U.S., and in 8-10 million passengers by 2030 with a double-digit growth per year. If this trend is confirmed, the Chinese market is expected to become the first overall.

“This new agreement highlights once again Fincantieri’s technical and technological leading position and it places us at the center of a project without equal in the world, supported directly by Chinese Government in the form of a very ambitious project," commented Giuseppe Bono, CEO of Fincantieri. “We are equipped to face the new international scenarios and we are selected today as a shipbuilding partner for the development of the cruise sector of a country which looks at this industry with great determination. The presence of our main customer Carnival, which will purchase the vessels covered by the agreement, is also of fundamental importance for the project’s success. This result is a victory and an incentive to work even harder in the future. It confirms the Group’s ability to be the first one to seize highly strategic opportunities and a worldwide leader in all the sectors in which it operates”. Bono concluded: “Finally, it is worth recalling that our Italian shipyards have work guaranteed on average for the next ten years and that the agreement may lead to additional benefits related to top level ship components and engineering,"

Wu Qiang, President of CSSC, commented: “Signing the cruise shipbuilding joint venture agreement with Fincantieri, one of the world’s largest shipbuilding groups, is another milestone event for CSSC, for the history and development of China’s cruise industry, as well as for the cooperation between China’s and Italy’s shipbuilding industry. Joining forces will give new vitality to the rapid growth of China’s and the Asian-pacific cruise market. We look forward to working together with Fincantieri, Carnival, CIC (China Investment Corporation) and other strategic partners to strive for building and delivering China's first domestic large cruise ship."

Royal Caribbean signs agreement with Miami-Dade County to build cruise terminal for Oasis-class ships

  • Written by Teijo Niemelä

Royal Caribbean Cruises Ltd. has announced an agreement with Miami-Dade County to construct and operate a dramatic new cruise terminal at PortMiami, on land leased from the County. The new terminal will be a striking addition to PortMiami, and will serve as homeport to Royal Caribbean International ships, including a 5,400-passenger Oasis-class ship, the world’s largest and most innovative cruise ships. The agreement will come before the Miami-Dade County Board of County Commissioners on July 6, 2016.

“We are truly excited to be working with Miami-Dade County and PortMiami to create not just another cruise terminal, but a truly iconic building,” said Richard D. Fain, chairman and CEO for Royal Caribbean Cruises Ltd. “This new terminal is a symbol of our commitment to Miami, the city where our company first started almost 50 years ago. We can’t wait to bring an Oasis-class ship to PortMiami.”

“Miami-Dade County is happy to welcome Royal Caribbean’s expansion at PortMiami, and all the economic benefits that come along with it," said Carlos Gimenez, Miami-Dade County Mayor. “This public-private partnership will have an estimated economic impact of $500 million and generate approximately 4,000 jobs. Royal Caribbean has been an important part of our world-class community for almost 50 years, and this expansion will once again make PortMiami Royal Caribbean’s largest cruise port in the world. I thank them for their continued investment in and commitment to Miami-Dade.”

Broadway Malyan has been selected as the firm to design the new terminal, after a global competition was held between five of the world's leading architectural firms. The firm was selected because of their creative thinking and cutting-edge design.

The 170,000-square-foot terminal is nicknamed the ‘Crown of Miami’ because of its distinct shape. The design evokes the points of the symbolic headgear when viewed from the water; the ‘M’ of Miami when viewed from the east or western approaches; and a sense of waves rising or ships passing when viewed from the terminal side. At night, the terminal’s facade will be lit ensuring that the building makes a striking impression and providing a dynamic addition to the PortMiami landscape.

The new terminal will not be the only addition for Royal Caribbean in the coming year. The company has committed to add a 20,000-square-foot Innovation Lab to its corporate headquarters located at PortMiami. The Innovation Lab will continue to generate Royal Caribbean’s industry-leading, innovative vessels.

Currently, PortMiami welcomes approximately 750,000 Royal Caribbean passengers annually, representing about 15 percent of its overall passenger traffic. Once the new cruise terminal is completed, it is anticipated that Royal Caribbean will generate at least 1.8 million passengers at PortMiami – representing no less than 30 percent of the port’s projected passenger traffic.

Carnival says booking volumes, prices higher than year-on

  • Written by Kari Reinikainen

At this time, cumulative advance bookings for the remainder of the year are well ahead of the prior year at slightly higher prices. Since March, bookings for the remainder of the year are at higher prices with volumes running lower than last year because there is less inventory remaining for sale than at this time in 2015, the company said in a statement.

The company expects full year 2016 net revenue yields on a constant currency basis to be up approximately 3.5% versus the prior year, compared to March guidance of approximately 3%. The company now expects full year 2016 net cruise costs excluding fuel per ALBD to be upapproximately 1.5% compared to the prior year on a constant currency basis, better than March guidance of  approximately 2.0%.

Taking the   above   factors   into   consideration,   the   company  expects full year 2016   adjusted earnings per share guidance to be in the range of $3.25 to $3.35, compared to March guidance of $3.20to $3.40 and 2015 adjusted earnings of $2.70 per share.

Arnold Donald, CEO, noted in the statement: “This is shaping up to be another strong year for our company as we expect over 20 % earnings growth and are approaching a nine percent return on invested capital.”

“We have accelerated progress toward our stated goal of achieving the double digit return threshold and have accelerated distributions to shareholders, “ he said.

Carnival Corp & plc reports trebling of second quarter net profit

  • Written by Kari Reinikainen

Carnival Corporation & plc, the world’s largest cruise shipping group, said its net profit in three months to 31 May rose to $605 million from $222 million in the same period last year, while revenues increased to $3.70 billion from $3.59 billion.

In the first half of its financial year, the Anglo-American group reported a net profit of $747 million, an increase from $271 million. Revenues rose to $7.36 billion from $7.12 billion

Arnold Donald, CEO, stated: “Our strong secondquarter demonstrates continued momentum as we again achieved a near doubling of adjusted earnings per share. Our ongoing effort to drive demand for our brands in excess of our measured capacity growth has led to increased revenues and helped maintain the mid-point of our full year earnings guidance despite the recent currency movements and rises in fuel prices that combined represent negative $0.17 per share.”

Key metrics for the second quarter 2016 compared to the prior year were as follows: On a constant currency basis, net revenue yields (net revenue per available lower berthday or “ALBD”) increased 3.6% for the 2Q 2016, which was better than th ecompany’s guidance of up 1.5% to 2.5%.

Gross revenue yields increased 1.3%. Net cruise costs excluding fuel per ALBD decreased 1.9% in constant currency, compared to March guidance, up 0.5% to 1.5% due to the timing of expensesbetween   quarters. Gross   cruise   costs   including   fuel   per   ALBD   in   current   dollars decreased 5.4%.

Donald also noted several major milestones that will contribute to the future of the company including the re-mastering of Queen Mary 2, the opening of Holland America’s Denali square complex in Alaska and the introduction of AIDA Cruises’ AIDAprima, Holland America Line’s Koningsdam, and Carnival Cruise Line’s Carnival Vista. In addition, building on a legacy of pioneering achievements, Carnival group became the first cruise company to begin operating voyages from the US to Cuba in more than four decades through its Fathom brand -- a historic moment that captured world wide media coverage.

CBR 2/2016 CONTENTS

CBR 1/2016 contents

CBR 3/2015 contents