News

Global cruise industry announces two new safety policies

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 26 June 2012 26 June 2012

On behalf of the global cruise industry, Cruise Lines International Association (CLIA) and the European Cruise Council (ECC) today announced that the cruise industry has adopted two new safety policies. These policies, which address issues related to the recording of passenger nationality and the common elements of musters and emergency instructions, result from the Cruise Industry Operational Safety Review launched in January 2012.

The Nationality of Passengers policy was developed in response to the request of governments at the May meeting of the International Maritime Organization (IMO) Maritime Safety Committee meeting. This policy prescribes that the nationality of each passenger onboard is to be recorded and made readily available to search and rescue personnel as appropriate. Under the Common Elements of Musters and Emergency Instructions policy, member cruise lines have specified 12 common elements that will be communicated to passengers in musters and emergency instructions. Among those common elements are a description of key safety systems and features and an explanation of emergency routing systems and recognizing emergency exits. Both policies exceed current international regulatory requirements.

“Our industry continues to actively identify a range of measures that will improve the safety of passengers and crew, which is the top priority of the cruise industry,” said Christine Duffy, president and CEO of CLIA. “Ongoing innovation in safety has been a hallmark of our industry for decades and we are fully committed to continuous improvement in shipboard operations and safety. We are taking a holistic look at safety as has been evidenced by the breadth and scope of the numerous policies that have been developed and adopted as part of the Review since its launch earlier this year”

“These new safety policies are representative of the industry’s commitment to raising standards across the global fleet and of our willingness to listen and act on good ideas brought forward by other interested stakeholders," said Manfredi Lefebvre d’Ovidio, Chairman of ECC. “Establishing common elements of a muster policy will provide our guests with the confidence that they are receiving the same key safety messages no matter which ship they cruise. Providing additional information on passengers’ nationality is a direct and immediate response to a good idea and, as with our other voluntary commitment, is applicable with immediate effect."

The Cruise Industry Operational Safety Review receives advice and input from a panel of outside maritime and safety experts. These individuals are evaluating suggested policy improvements as part of the cruise industry’s continuous efforts to review and improve safety measures by developing comprehensive best practices for industry-wide implementation and, ultimately, formal submission to the International Maritime Organization, as appropriate Each of these policies will be reported to the IMO for consideration at its next session in November.

A full version of the Nationality of Passengers policy can be accessed at http://www.cruising.org/regulatory/clia-policy-recording-nationality-passengers. The Common Elements of Musters and Emergency Instructions policy is available athttp://www.cruising.org/regulatory/clia-policy-common-elements-musters-and-emergency-instructions. All CLIA policies can be viewed at http://cruising.org/regulatory/cruise-industry-policies.

CLIA announced the launch of the Review on January 27, 2012. As part of the Review, in February, the global cruise industry instituted a new policy requiring mandatory emergency muster drills for embarking passengers prior to departure from port. In March, the industry put forth recommendations to the IMO supporting enhanced reporting requirements to improve the consistency and transparency of marine casualty data. In April, it announced three policies addressing issues related to passage planning, personnel access to the bridge and lifejackets. Additional best practices and policies developed through the Cruise Industry Operational Safety Review will be announced and implemented on an ongoing basis.

Carnival Corporation & plc reports second quarter results

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 22 June 2012 22 June 2012

Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announced non-GAAP net income of $159 million, or $0.20 diluted earnings per share for the second quarter of 2012. Reported U.S. GAAP net income, which includes unrealized losses on fuel derivatives of $145 million, was $14 million, or $0.02 diluted earnings per share. Net income for the second quarter of 2011 was $206 million, or $0.26 diluted EPS. Revenues for the second quarter of 2012 were $3.5 billion compared to $3.6 billion for the prior year.

Carnival Corporation & plc Chairman and CEO Micky Arison noted that non-GAAP earnings were better than anticipated in the company’s March guidance due primarily to a combination of higher than expected revenue yields and lower than expected costs, partly attributed to non-recurring items, in the second quarter.

Commenting on the second quarter, Arison said "Cruise ticket prices (excluding Costa) held firm close to sailing which, combined with stronger than expected onboard revenues, drove yields above prior year levels. Our North American brands performed well, achieving a 3 percent revenue yield improvement compared to the prior year, which more than offset slightly lower yields for our Europe, Australia and Asia brands (excluding Costa). In addition, continued focus on cost controls and fuel consumption helped to mitigate the impact of higher fuel prices in the quarter."

Key metrics for the second quarter 2012 compared to the prior year were as follows:

– Second quarter results included $17 million, or $0.02 per share, of insurance proceeds in excess of net book value which were previously expected to be received in the third quarter, and $17 million, or $0.02 per share, received from a litigation settlement.

– On a constant dollar basis net revenue yields (net revenue per available lower berth day, “ALBD”) decreased 1.4 percent for 2Q 2012, which was better than March guidance, down 2.5 to 3.5 percent. Excluding Costa, net revenue yields increased 1.1 percent for 2Q 2012, which was also higher than March guidance of flat to down slightly. Gross revenue yields decreased 4.2 percent in current dollars.

– Net cruise costs per ALBD excluding fuel and non-recurring items decreased 2.2 percent in constant dollars, better than March guidance of flat to down 1.0 percent. Gross cruise costs per ALBD including fuel and non-recurring items decreased 3.6 percent in current dollars.

– Fuel prices increased 12 percent to $756 per metric ton for 2Q 2012 from $673 per metric ton in 2Q 2011, costing the company an additional $71 million. Fuel prices were slightly lower than March guidance of $772 per metric ton.

– In March, the company entered into zero cost collars for an additional 19 percent of its estimated fuel consumption for the second half of fiscal 2012 through fiscal 2013, bringing the total covered to 38 percent over this period. The company also has zero cost collars in place that cover 19 percent of its estimated fuel consumption for fiscal 2014 and 2015. For further information on the company’s fuel derivatives program see “Fuel Derivatives” below.
– Three new ships were delivered during the second quarter, Costa Fascinosa, AIDAmar and Carnival Breeze, each featuring a variety of unique and exciting innovations which have generated strong consumer and media interest.

2012 outlook

Since March, fleetwide booking volumes have continued to improve and are running well ahead of the prior year at lower prices. For the last seven weeks, booking volumes excluding Costa have increased 8 percent versus the prior year, while booking volumes for Costa over the same time period are up 25 percent. For the remainder of the year, cumulative advance bookings excluding Costa are three occupancy points behind the prior year at slightly lower prices while cumulative advance bookings for Costa are at lower occupancies and lower prices compared with the prior year.

Looking forward, Carnival Corporation & plc Chairman and CEO Micky Arison commented, "The increase in booking volumes indicates that a progressive recovery is well underway and we are catching up following the slowdown in bookings during wave season, our peak booking period. The attractive pricing we have in the marketplace is clearly stimulating demand, especially for the Costa brand. We are pleased to see the resurgence in consumer demand for Costa, which is a testament to the brand’s long-standing reputation for quality built over many decades."

Excluding Costa, the company forecasts full year 2012 net revenue yields, on a constant dollar basis, to be down slightly. Including Costa, the company expects a decline in net revenue yields of 3 to 4 percent (constant dollars). The company has slightly reduced the mid-point of its 2012 yield guidance as the price incentives required to drive the booking volumes needed to close the occupancy gap was more than had been previously anticipated for the second half of the year. Full year 2012 revenue yields for the North American brands are expected to be in line with the prior year. Full year 2012 revenue yields for the European brands, excluding Costa, are expected to be lower than the prior year.

Lower net revenue yield expectations have been offset by greater than anticipated cost reductions. The company expects net cruise costs, excluding fuel, per ALBD for the full year 2012 to be down slightly compared with the prior year on a constant dollar basis. In addition, lower fuel prices (net of forecasted realized losses on fuel derivatives) partially offset by changes in currency exchange rates are expected to increase full year 2012 earnings by $0.30 per share compared to March guidance.

Taking all the above factors into consideration, the company forecasts full year 2012 non-GAAP diluted earnings per share to be in the range of $1.80 to $1.90, compared to the March guidance range of $1.40 to $1.70 per share and 2011 non-GAAP earnings of $2.42 per share.

Arison stated, "The long term fundamentals of our business remain sound. As we look toward the future, we are excited by the prospect for continued global expansion beyond our established markets in North America and Western Europe. We are pursuing multiple opportunities to develop emerging cruise markets including positioning a second Costa ship in China and through a series of Princess cruises dedicated to the Japanese market in 2013."

Third quarter 2012 outlook

Third quarter constant dollar net revenue yields excluding Costa, are expected to decrease 3 to 4 percent (including Costa, expected to decrease 6 to 7 percent) compared to the prior year. Net cruise costs excluding fuel per ALBD for the third quarter are expected to be down slightly on a constant dollar basis compared to the prior year. In addition, changes in currency exchange rates partially offset by lower fuel prices (net of forecasted realized losses on fuel derivatives) are expected to reduce third quarter earnings by $0.03 per share compared to the prior year. Based on the above factors, the company expects non-GAAP diluted earnings for the third quarter 2012 to be in the range of $1.42 to $1.46 per share versus 2011 non-GAAP earnings of $1.69 per share.

Regent Seven Seas reported to be close to newbuilding order

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 19 June 2012 19 June 2012

Regent Seven Seas, the luxury line whose last new-build was introduced in 2003, is close to placing an order for a new ship, Regent's President and CEO Mark Conroy has told Cruise Critic.

Conroy was is in London last week ahead of a President's Cruise on Seven Seas Mariner, which departed Rome on Saturday, 15 June. “Though not radically different size-wise from the 42,363-ton, 700-passenger Seven Seas Voyager, which features all-suite accommodations and three speciality restaurants, there will be some enhancements. Plans for the as-yet unnamed newbuild include a bigger spa, ‘slightly bigger suites' and up to 750 passengers,” the report said.

Rumours of a new Regent ship have been circulating for years but gained particular momentum last year, when Frank del Rio, chairman of Prestige Cruise Holdings,which is Regent's parent, admitted he'd been thinking about expanding the three-ship fleet. (In fact, even prior to PCH's acquisition of Regent Seven Seas in 2008 Conroy had expansion in mind – and blueprints at the ready).

Conroy said: “It makes sense to build another ship and add more capacity when we are comfortable to do that, and that means we need regular occupancy rates. As abrand you have to keep reinventing yourself, and eventually you have to increase capacity.”

In 2011, a very challenging year for the luxury cruise niche, Regent had an astonishing 92 percent occupancy rate, with just 11 cruises that were not 100% full throughout the whole year. Conroy noted that it's likely that the new vessel will be built at one of Fincantieri's Italian shipyards, (Seven Seas Voyager was built at Italy's T.Mariotti), but Conroy would not be drawn on a launch date.

Arguably, the time is now right: occupancy levels are the highest they have ever been and UK sales are up 120% year-on-year according to Graham Sadler, Regent's UK Managing Director, Cruise Critic said.

Regent Seven Seas, which is part of the Prestige Cruise Holdings group that also owns Oceania Cruises, has three ships at the moment: Seven Seas Mariner, Seven Seas Voyager and Seven Seas Navigator.