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Carnival Corp & plc: repeaters increase to 68% from 54% of total volume in six years

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 23 April 2013 23 April 2013

The proportion of passengers who return to cruise on ships of Carnival Corporation & plc brands has increased to 68% last year from 54% in 2006, but in absolute terms the number of first timers has not declined thanks to the growth of the total volume, said Howard S. Frank, said Vice Chairman, Chief Operating Officer and Member of Executive Committee of the world’s largest cruise shipping group.

“In 2006… we sailed with 7 million passengers on a worldwide basis. In 2012, we sailed with an excess of 10 million passengers on a worldwide basis. What's interesting is that repeat cruises in the left-hand side, in 2006, were 54%, that is people who come back and cruise with us. We've increased that to 68%,” Frank told the shareholders’ meeting of the dual listed group in London last week.

“Why is that important to our business? Because repeat cruises are our best customers. They understand cruising, how to have fun on a ship, how to enjoy it and they pay the best prices for our cabins and they spend the most on board. So having this enumerator of 68% of your 10 million passengers that are repeat cruisers, is an ongoing revenue stream for us.”

“It's very important. And as we've grown this in that six-year period, that endures to our benefit. At the same time, you can see our first time cruisers have come down from 46% to 32%. But in reality, they haven't come down at all because it's still 3 million passengers of -- 3 million passengers in 2006 were new cruisers. It's the same 3 million passengers on an absolute basis in 2010. So what is good, is you need to get cruisers to your ship the first time so they come back and repeat, so we need to continue to drive new business for us, new cruisers, introducing new people to cruising.”

TUI Cruises expects STX Finland to complete Mein Schiff 3 on time

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 22 April 2013 22 April 2013

TUI Cruises, the Hamburg based joint venture between TUI AG and Royal Caribbean Cruises Ltd (RCCL), says it expects STX Finland to complete Mein Schiff 3, the first of two newbuildings in has on order at the Finnish yard, on timedespite a delay in implementation of a multi-party agreement to inject funds in the yard.

“Unfortunately the materialisation of the agreement has taken longer than expected.  However, now the owner has taken the necessary steps to move forward and TUI Cruises expects to proceed with the original agreements this week,” the Hamburg based company said in a statement.

It made the statement in light of recent public speculation relating to the shipyard, the company also confirmed that it expects all details to be clarified and confirmed with a few days.  “The company noted that all relevant parties, including the shipyard, its owner, the buyer, the Finnish government and Finnish government agencies, previously reached an agreement to cover the financing of the work and ensure that the shipyard had the liquidity it needed to complete the ship on time,” TUI Cruises said.

“We are confident that this ship will make all of us involved in the process proud,” said Richard Vogel, TUI Cruises President and CEO, who is in Finland this week reviewing the status of the construction of the company’s two ship orders and provided an update.

Vogel noted that Mein Schiff 3 had just reached an important milestone – construction at STX Finland is now 25% complete and the main engines have completed their acceptance testing.  Formal keel-laying has been set for Friday 24 May, 2013 with delivery almost exactly one year later.  “It is very exciting to see all the pieces coming together to form this spectacular vessel,” said Vogel.  “We can’t wait to amaze our guests with the special spaces aboard this beautiful and innovative ship.”

The construction of the vessel is being overseen by Harri Kulovaara, EVP-Maritime of RCCL, who also commented that the pace of construction was encouraging.  “I have no doubt in the ability of the Finnish yard and its contractors to complete this ship in a timely way and to produce yet another excellent ship.”

Suspension of activities at STX Finland “highly likely” – report

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 19 April 2013 19 April 2013

The Finnish government is preparing for the possibility that activity at the two shipyards of STX Finland would be suspended in the next couple of weeks due to lack of funds, the Finnish broadcasting company YLE reports on its website.

“According to the information obtained by YLE News, the government considers the suspension of activity at STX shipyards in Turku and Rauma highly likely,” the broadcaster reported.

YLE did not disclose the source of the information.

“According to assessment of the situation, STX Finland should obtain new funding in the next couple of weeks in order to be able to maintain its activities. Three Finnish civil servants have been in South Korea on a fact finding mission,” the report continued.

STX Finland is part of STX Europe headquartered in Oslo, which again is owned by STX Shipbuilding & Offshore, one of the three listed main companies in the Seoul based STX Business Group. The group is facing financial difficulties and, according to YLE, it has not been able to meet its obligation based on an agreement earlier this year to inject cash in the Finnish subsidiary.

Earlier this year, the government agreed to buy the site of STX Finland’s Turku shipyard and the STX group agreed to inject funds into STX Finland to ensure the completion of two 97,000 gross ton cruise liners the company has on order from TUI Cruises in Germany.

Carnival Cruise Lines announces fleetwide $300 million program to enhance operating reliability and guest comfort

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Written by Teijo Niemelä Teijo Niemelä

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Published: 17 April 2013 17 April 2013

Carnival Cruise Lines, a unit of Carnival Corporation & plc, today announced that it has implemented a program to significantly enhance emergency power capabilities, introduce new fire safety technology, and improve the level of operating redundancies across its entire 24-ship fleet. This enhancement program will cost more than $300 million, and rapid upgrades have already begun.

The actions by Carnival Cruise Lines will expand the availability of hotel services for the comfort of its guests in the rare instance of a shipboard event that involves the loss of main power. In addition, the plan will reinforce key shipboard operating systems to further prevent a potential loss of primary power. The improvement plan is the result of a comprehensive operational review, overseen by parent company Carnival Corporation & plc, initiated immediately after the Carnival Triumph fire in February 2013.

"All of Carnival Cruise Lines' ships operate safely today. Each vessel already has effective systems in place to prevent, detect and respond to emergency situations, and we meet or exceed all regulatory requirements," said Gerry Cahill, president and CEO of Carnival Cruise Lines. "However, by applying lessons learned through our fleet-wide operational review after the Carnival Triumph fire and by taking advantage of new technologies, we have identified areas for enhancement across our operations. These initiatives reflect our commitment to safe and reliable operations and an enjoyable cruising experience for the nearly 4.5 million guests who sail with Carnival Cruise Lines each year."

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Increased Emergency Generator Power

The initial increase in emergency generator power across Carnival Cruise Lines' fleet of 24 ships will be completed over the next several months. An additional emergency generator will be installed on each vessel to provide for 100 percent of stateroom and public toilets, fresh water and elevators in the unlikely event of a loss of main power. The work is already underway and will not affect scheduled itineraries. Upon completion of the initial phase, the line will install a second permanent back-up power system on each ship to provide an even greater level of hotel and guest services if main power is lost. These additional services will include expanded cooking facilities and cold food storage, as well as internet and telephone communications.

"Although every ship in our fleet currently has emergency back-up power which is designed to enable the continuous operation of safety equipment and some hotel services, it is our intent to significantly bolster that back-up power to support the core hotel services. With this improvement, we will better ensure guest comfort in the rare instance of a loss of main power," said Cahill.

Increased Fire Prevention, Detection and Suppression Systems

The company will also make additional investments in the newest and most technically advanced fire prevention, detection and suppression systems. This includes upgrading the existing water mist fire suppression systems already in place on Carnival vessels to the newest generation. When triggered, this high-pressure water mist system instantly creates a larger and thicker blanket of water droplets than the present system. As the water droplets evaporate, the system also rapidly cools any hot areas to prevent the possibility of a fire restarting.

"On Carnival Triumph, our fire systems were effective and our teams performed well in controlling and extinguishing the fire. However, we want to take advantage of the latest and most-advanced generation of fire safety systems to enhance the current extensive capabilities across our fleet," added Cahill.

Enhanced Operating Redundancies

All of Carnival Cruise Lines ships have two separate, redundant engine rooms. The company's operational review has identified modifications to further decrease the likelihood of losing propulsion or primary power, as happened on Carnival Triumph in February. The modifications will include a reconfiguration of certain engine-related electrical components. On ships where these enhancements will be made, the design and fabrication of specialized components will require longer lead times for completion, in contrast to the immediate upgrades to back-up emergency power and other systems.

Last month, Carnival Cruise Lines announced results from the first phase of the company's operational review, specifically addressing Carnival Triumph and Carnival Sunshine, both of which are currently out of service. The plan for each of these ships addresses each of the three areas outlined above.

Company to Form New Safety & Reliability Review Board

Carnival Cruise Lines also announced the formation of a Safety & Reliability Review Board comprised of outside experts with significant expertise in marine and occupational safety, reliability and maintenance, marine regulatory compliance and quality control/assurance. The company already receives oversight and input from outside regulatory authorities and industry experts. The new Review Board will provide an additional, independent third-party perspective, drawing from deep experience across a number of relevant fields and organizations.

The Review Board will be comprised of five external members. Active searches are underway for candidates with previous experience in organizations such as the U.S. Navy, U.S. Coast Guard, and National Transportation Safety Board, as well as leading airlines and equipment manufacturers.

"The formation of our Safety & Reliability Review Board is an integral part of how Carnival Cruise Lines will drive continuous improvement across our fleet. We will be responsive to its recommendations," said Cahill.

Carnival Corporation & plc Fleet Enhancements

Parent company Carnival Corporation & plc previously announced a corporate-wide operational review of all 10 of its brands and 101 ships. The review process will include learnings from the recent incidents that can be applied across the corporation's fleet. Carnival Corporation & plc has confirmed that, based on the results of the ongoing review, the latest versions of technologies and enhancements will also be implemented on the remainder of the fleet where they are not already present. The overall program of enhancements across the corporation's 101-ship fleet, including Carnival Cruise Lines' ships, is expected to cost between $600 and $700 million.

"Our fleet already operates at a high standard of reliability. The investments announced today for Carnival Cruise Lines, and those we will continue to make, will reinforce our ability to consistently deliver the customer experience that 10 million people every year have come to expect from us across our fleet of 101 ships. Absolutely nothing is more important than the safety and comfort of our guests and crew, and we will use the full resources of our company to meet that commitment," said Micky Arison, Chairman and CEO of Carnival Corporation & plc.

Initial implementation of the upgrades to the Carnival Corporation & plc fleet will take place during the next several months. Each class of ship is different and often systems differ on ships within a class, so the enhancements will be tailored to each vessel. All findings from the operational review will be shared with Cruise Lines International Association (CLIA) as part of the industry-wide operational review announced in March.