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Carnival in Costa Concordia cost assessment

  • Written by Kari Reinikainen
  • Category: Top Headlines

Carnival Corp & plc, parent company of Costa Crociere whose 114,500 gross ton Costa Concordia ran aground on the coast of Italy on 13 January, has calculated costs of the accident.

The company said in a filing with the New York Stock Exchange that the 2006 built ship had a book value of $490 million at the end of last year. It is insured for $510M, but deductibles should amount to about $30M. In addition, Carenival expects other costs related to the incident amount to $30-$40 million.

Carnival also reiterated an earlier assessment that the 2,978 passenger capacity ship’s absence from service would reduce its net earnings by $85-$95 million this financial year that ends 30 November.

CLIA launches safety review

  • Written by Kari Reinikainen
  • Category: Top Headlines

Cruise Lines International Association (CLIA ) says it will launch an operational safety review in the wake of Costa Concordia's grounding on 13 January on the west coast of Italy.

"In response to the Concordia incident and as part of the industry’s continuous efforts to review and improve safety measures, the Cruise Lines International Association, Inc. (CLIA), speaking on behalf of the global cruise lines industry, today announced the launch of a Cruise Industry Operational Safety Review.  The Review will include a comprehensive assessment of the critical human factors and operational aspects of maritime safety.   As best practices are identified, they will be shared among CLIA members and any appropriate recommendations will be shared with the IMO.  Recommendations will be made on an ongoing basis," the organisation said in a statement.

Key components of the Review include:

An internal review by CLIA members of their own operational safety practices and procedures concerning issues of navigation, evacuation, emergency training, and related practices and procedures. 

Consultation with independent external experts.

Identification and sharing of industry best practices and policies, as well as possible recommendations to the IMO for substantive regulatory changes to further improve the industry’s operational safety.

Collaboration with the IMO, governments and regulatory bodies to implement any necessary regulatory changes. 

"While the cruise industry has an outstanding safety record, CLIA is fully committed to understanding the factors that contributed to the Concordia incident and is proactively responding to all maritime safety issues.  The Cruise Industry Operational Safety Review will enable the industry to do so in a meaningful and expedited manner," CLIA said.

 

Labor strikes delay Oceania Cruises' new Riviera

  • Written by Teijo Niemelä
  • Category: Top Headlines

Oceania Cruises was notified by Fincantieri late last week of construction delays and as a result, will reschedule the maiden voyage of its m/s Riviera. Construction on the 1,250-guest ship fell behind schedule when strikes at Fincantieri's shipyard near Genoa, Italy, lasted longer than expected. The maiden voyage of Riviera has moved from April 24 to May 16, and all guests affected by the delay will be contacted by their travel agents or by Oceania Cruises directly to discuss alternative cruise dates.

"We sincerely regret any inconvenience that this may cause our guests," stated Kunal S. Kamlani, the cruise line's president. "We are working very closely with the shipyard to ensure Riviera is completed to meet Oceania's high standards of quality and service."

"We know that sophisticated international travelers are anxious to welcome Riviera and we regret that labor strikes have caused this delay," said Giuseppe Bono, Fincantieri's chief executive officer. "All of us at Fincantieri are committed to producing a superior quality ship and we will deliver a truly magnificent vessel to Oceania Cruises without further delays."

The new maiden voyage is a 10-day Pearls of the Aegean cruise that includes an overnight aboard ship in Venice before visiting Dubrovnik, Kotor, Corfu, Monemvasia, Crete, Santorini, Kusadasi (gateway to Ephesus), Delos, Mykonos and Athens.

Guests booked on affected sailings will have the option of rebooking another cruise and receive a future cruise credit, which ranges from $250 to $1,000 per guest, depending on category of accommodation. In the event guests do not wish to rebook, they will receive a full refund. Travel agent commissions will be protected.

All Leisure Group stages strong recovery

  • Written by Kari Reinikainen
  • Category: Top Headlines

All Leisure Group, the UK based parent of Swan Hellenic, Voyages of Discovery and Hebridean Island Cruises, has staged a strong recovery and returned to profit in the latest financial year that ended 31 October 2011. Group net profit amounted to £5.7 million in 2011, according to preliminary figures, compared to a loss of £2.1 million a year earlier. Operating profit rose to £3.4 million from £3.1 million

“We have taken the strategic decision to manage our capacity and plan significant dry docks, refits, maintenance and upgrades during 2012.  In addition, we will continue to develop new routes to market, for example via GDS and on-line to broaden customers' options and product offerings,” Chairman Roger Allard said in a statement.

Minerva’s €14 million upgrade, currently in progress, is mainly being paid for by the vessel’s owner. “In return for these improvements, we have extended the lease for a further 8 years to November 2021 at the same lease rate.  We have also agreed to assist the owner's financing of these improvements by paying an additional deposit of up to €2 million; this deposit will be recovered by way of non-payment of lease rentals at the end of the lease term.”

“These improvements should benefit our yield and bottom line for the year ending October 2013 and beyond.  We are delighted to say that we are seeing some benefits being delivered for this summer, with per diem fares 11% higher than those for Summer 2011.  As a result of mv Minerva being out of service for the majority of the winter season, understandably winter losses will be higher than those for 2010/11, although we are investing for, and should reap the benefits over the next 10 years.”

“mv Discovery is operating in the Middle and Far East and Australia this Winter and, due to the challenging trading conditions, we expect  revenues and occupancy to be lower than last year.   However, per diem fares are 4% up on those achieved at the same point last year for Summer 2011.”

“Sales of Hebridean Princess are slower than last year, although per diems are being maintained.  However, the inaugural river cruise programme is already over 75% sold," Allard said.

Cruise ticket prices edge higher after Costa Concordia - UBS

  • Written by Kari Reinikainen
  • Category: Top Headlines

Fears that the grounding of Costa Concordia in Italy on 13 January might derail appear not to have materialised as ticket prices seem to be firming. “As we are now moving into the heart of Wave Season, and as we are now one full week past the Concordia incident, we thought it timely to check on cruise pricing for the past week,” UBS cruise industry analyst Robin Farley said.

“Although we expected that a strong start to Wave Season would likely be derailed by the accident in Italy last week, ticket prices increased ~40bp in price sequentially week-over-week, and could be up as much as ~1% since the start of the year, according to our UBS Cruise Data Tracker. What is even more surprising is that average ticket prices increased since the start of the year for almost every brand that we survey, including Costa.”

“While still early, impact so far on bookings may not be as negative as one might have expected. Our EPS adjustments last week assume 50bp impact on total demand, with ~10% impact to Costa specifically, which nets to 200bp impact to CCL Carnival Corp & plc) and 50 bp impact to RCL (Royal Caribbean Cruises Ltd)."

“Our pricing checks indicate that for the 2012 cruising season, cruise prices across the Caribbean have been up moderately in the last few weeks, including another slight uptick so far in Wave. Caribbean has shown strength since the second to last week of December. Alaska is moderately up since start of year, including an uptick in the last week. Finally, our checks indicate that Med cruise pricing has been stable since the downward pricing adjustment in early November,” she said in a report.

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