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Tallink cuts first quarter loss as efficiency drive bites

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 15 May 2015 15 May 2015

Tallink Grupp, the listed Estonian cruise ferry company, has reduced its losses in the first quarter on an efficiency drive, but passenger volumes fell as well in the review period.

Group net loss narrowed to €13.3 million in the first three months of the year from €23.4 million in the corresponding 2014 period. Revenues rose a fraction, to €190.2 million from €188.2 million.
The group's ships carried nearly 1.8 million passengers which is 5.9% less compared to the same period last year, Tallink said in a statement.

The Group made various changes to the operations during the past year and these affected the first quarter with decreased passenger volumes but increased revenue and profitability. The reduction of operating costs from the measures taken has the highest effect to the first quarter profitability, which is also the low season," Tallink said.

In the first quarter the Estonia-Finland route showed positive developments with revenue increasing by 2.7% driven by a 21.3% growth in cargo units. The increase to the cargo volume was partly from Sea Wind switching from the Finland-Sweden routes to the Estonia-Finland route.

The Estonia-Sweden route, where capacity is lower than last year, experienced a 9.9% decrease in passengers and a 10.4% decrease in cargo volumes. The Latvia-Sweden route showed a decline with passenger’s numbers decreasing by 41.2%, cargo units transported decreased by 59.6%, passenger vehicles transported decreased by 33.0% and the sales decreased by 39.4%.

"The decline in passenger and cargo volumes on the Latvia-Sweden route is due to Isabelle operating as the only vessel on the route since the beginning of August 2014. Throughout the first quarter price pressure from competitors remained visible on all routes. The passenger volumes have been affected by the drop of Russian passengers since the second quarter last year and has continued to this date,." Tallink pointed out.

In the first quarter altogether 6 vessels were chartered out. Due to the increased number of chartered vessels the revenue from charters increased by €7.3 million or 85.9% to the total of €15.7 million. Two of the vessels Silja Festival and Regina Baltic are to be sold in the second quarter of the 2015 financial year.

The upgrades of the public areas and improvements to restaurant and shop concept throughout the fleet combined with the operational changes have resulted in a 3.5% increase in on-board revenue per passenger. Due to the changes in operations the segment result improved on all segments and was €14.9 million higher than in the same period last year, Tallink said.

Royal Caribbean International selects new creative agency

Details: Written by Teijo Niemelä Teijo Niemelä; Category: More News More News; Published: 14 May 2015 14 May 2015

Royal Caribbean International today announced its intent to retain Mullen Lowe of Boston, Massachusetts to lead the cruise line’s creative efforts, pending successful contract negotiations.

"After an extensive search we are thrilled to announce our partnership with Mullen Lowe," said Michael Bayley, President & CEO, Royal Caribbean International. "We are impressed by their strategic and creative thinking, which matches the energy and innovative imagination of our brand."

Mullen Lowe was selected after an extensive agency review process, during which all of the finalist agency teams presented outstanding industry resources and made commendable efforts to demonstrate their skills and creative talent. Mullen Lowe, an award-winning agency which was named to Ad Age’s Agency A-List in three of the past five years and also named a Creativity Innovator of the Year in 2014, is part of the Interpublic Group (NYSE: IPG) of agencies.

"Royal Caribbean has an amazing fleet of innovative ships and a commitment to delivering unforgettable adventures to travelers," said Alex Leikikh, CEO, Mullen Lowe Group. "We’re excited to help Royal Caribbean firmly differentiate their brand, increase guest loyalty and inspire first-time cruisers to discover the transformative effect of a Royal Caribbean experience."

Royal Caribbean International is an award-winning global cruise brand with a 45-year legacy of innovation and introducing industry “firsts” never before seen at sea. The cruise line features an expansive and unmatched array of features and amenities only found on Royal Caribbean including, jaw-dropping, Broadway-style entertainment and industry-acclaimed programming that appeals to families and adventurous vacationers alike.

TUI earmarks Mein Schiff 1 and 2 for Thomson Cruises

Details: Written by Teijo Niemelä Teijo Niemelä; Category: More News More News; Published: 13 May 2015 13 May 2015

TUI AG, the world’s largest tour operating company, says Mein Schiff 1 and Mein Schiff 2 could be transferred to Thomson Cruises from TUI Cruises, which is due to receive up to four newbuildings.

Thomson Cruises has a small, but significant market share in the UK with access to Thomson’s distribution network, the company officials said in an investor day presentation in London today.

"Fleet modernisation is required to maintain market share:

– Acquisition of Splendour announced for Q2 calendar 2016;
– Opportunity to re-fleet two further ships with MS 1 and 2;
– Intend to move closer to the TUI Cruises model," TUI stated.

Splendour refers to Splendour of the Seas of 69,130 gross tons that Royal Caribbean Cruises Ltd (RCCL) has sold to TUI Cruises, a 50/50 joint venture with TUI. The Hamburg based company will be in charge of technical management, while Thomson in the UK will commercially operate the 1996 built ship. MS1 and 2 refer to the 1996 built 76,522 gross ton Mein Schiff 1 and Mein Schiff 2 of 77,713 gross tons that was built in 1997, respectively.

Thomson Cruises leases its current fleet, with the leases of the 33,930 gross ton Thomson Spirit that of the 40,876 gross ton Thomson Majesty both due to expire in 2017.

Thomson Celebration, which is of 33,930 gross tons, has three more years of its lease left, while Thomson Dream that is of 53,876 gross tons, has five years, TUI said in the presentation.

Viking Line cuts loss but warns of uncertain outlook

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 13 May 2015 13 May 2015

Viking Line, the Finnish cruise ferry group, has halved its net loss in the first quarter, but the company warns that the future development of fuel price can impact its full year result significantly.

Group net loss narrowed to €8.2 million in the review period from €15.6 million in the first three months of 2014. Revenues rose a fraction, to €105.0 million from €103.4 million. Lower dry docking costs and operating expenses explain the reduction of the loss.

The company's fleet carried 1.27 million passengers, up from 1.23 million, while the number of freight units increased to 34,500 from 31,200. It noted that competition remains tough in its markets, but forecast EBIT to exceed this year the €13.7 million of 2014, although price of fuel can significantly affect the outcome.

TUI expected to bring Hapag-Lloyd and Thomson Cruises brands into TUI Cruises operation

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 11 May 2015 11 May 2015

TUI, the world's largest tour operating company, is expected to bring its Hapag-Lloyd Kreuzfahrten brand in Germany and Thomson Cruises in the UK to the operation of TUI Cruises, its joint venture with Royal Caribbean Cruises, Ltd. (RCCL), media reports say

"TUI is also expected to outline plans to bring its Thomson Cruise and Hapag-Lloyd Kreuzfahrten operations into its joint venture with Royal Caribbean to improve cross-selling and operational synergies, according to a research note from Morgan Stanley," Travel Weekly reported in the UK.

TUI will hold a capital markets day for investors in London on Wednesday, when it is also due to publish its first quarter interim result. The company is headquartered in Hannover in Germany and listed on the stock exchanges in Frankfurt and London.

In March, Thomson Cruises said it would receive the current Spledour of the Seas from RCCL in the summer of 2016, which it will introduce as Thomson Discovery. "The ship will be acquired by the Group’s subsidiary TUI Cruises, a joint venture between TUI Group and Royal Caribbean Cruises Ltd., and chartered to the Group’s British cruise line Thomson Cruises. Splendour of the Seas is to be operated in the British market from Summer 2016. The vessel will replace Island Escape, currently operated by Thomson Cruises’ sister company Island Cruises, so that the overall UK fleet will continue to be comprised of five cruise ships. Financial details of the transaction were not disclosed," TUI said on 2 March.

"As already announced at our Annual General Meeting, we intend to continually modernise our fleet in the UK in the next few years. The acquisition of the Splendour of the Seas is the first step in this direction. We regard the cruise market as a growth market for our Group and intend to develop into one of Europe’s leading providers in this segment," said Sebastian Ebel, TUI Group CEO Platforms in charge of cruise operations.

The TUI Group currently has a fleet of 13 cruise ships via its subsidiaries TUI Cruises, Hapag-Lloyd Kreuzfahrten and Thomson Cruises. Mein Schiff 4 of TUI Cruises was delivered last week and commissioned in the summer of this year. Mein Schiff 5 and Mein Schiff 6 have already been ordered and will be delivered in 2016 and 2017.