The cruise ship building industry is facing severe overcapacity as new orders cannot be expected for a few years and the Meyer group of shipyards needs to adjust its capacity to a new normal, two senior officials of the group said.
Due to the severity of the crisis, no new orders can be expected before 2023 or 2024, said Thomas Weigend, CEO of Meyer Werft, the German unit of the group, in a video message to the staff.
Bernard Meyer, Chairman and Owner, stated on the same video that it would take up to 2030 for the newbuilding market to return to the levels seen last year, before the crisis.
Cruise shipping companies would book massive losses for this year and break even in 2021 before probably returning to profit in the following year, he added.
Only between a half and three quarters of the global cruise ship fleet of some 400 ships would resume service this year, Weigend forecast.
Given the severity of the crisis, the lines will also seek to postpone deliveries and in order to avoid cancellations of orders, the Meyer Group will have to reduce its capacity. At Papenburg, this means cutting one large ships per year from the present output of two large and one smaller ship per year, Weigend continued.
In order to adapt to the new normal, Weigend said the company plans to reduce the hours worked by its own staff, reduce the use of contractors and to stop overtime and weekend work.
The cruise industry has experienced four major shocks since he started at the family owned company in 1973. The first one was the oil crisis the same year Meyer started his shipbuilding career and from which it took the global shipbuilding industry two decades to recover.
The 911 terrorist attacks in 2001 and the financial crisis seven years later were both major events, but neither of these brought the entire global cruise fleet to a standstill as has been the case with the coronavirus, said Bernard Meyer.
P&O Cruises' Iona departed Meyer Werft last month. New delivery date is not set yet. Photo credit: Meyer Werft
