Norwegian Cruise Line orders ships for 2018 and 2019

By Tom Stieghorst

Norwegian Cruise Line said it has ordered ships for delivery in 2018 and 2019 from Germany’s Meyer Werft shipyard that together will cost about 1.6 billion euros ($2.2 billion).

The ships will be the third and fourth in the “Breakaway Plus” class that can carry about 4,200 passengers.

The first two ships in the series, Norwegian Escape and Norwegian Bliss, are due for delivery in the fall of 2015 and spring of 2017. The third and fourth ships don’t have names yet.

After all four ships are finished, Norwegian would have 17 vessels in its fleet, barring any disposals. It will have added ship a year from 2013 to 2019 with the exception of 2016.

Norwegian said export credit financing is in place for the two new orders, arranged and underwritten by KfW IPEX-Bank of Germany.

Carnival Corp. CEO: Competitors’ newbuilds may hurt pricing

By Tom Stieghorst

MSC Cruises’ order book of four big new ships is an example of a trend that could spell trouble for an industry struggling to raise prices, Carnival Corp. CEO Arnold Donald said.

“We’ll have to see how it all plays out,” Donald said in a recent teleconference with reporters. “In an ideal world, you wish it wasn’t happening.”

Donald was not singling out MSC’s expansion for criticism, but he happened to be making his comments on the day the line ordered two 4,170-passenger ships. That came on the heels of an order for two 4,500-passenger ships, part of a plan to double MSC’s capacity by 2022.

Asked how prices can rise if Carnival Corp. restrains its own brands’ capacity growth while other lines don’t, Donald said he was confident that Carnival’s strategy was sound. It includes incremental growth in onboard revenue and ticket prices spread over 78 million passenger days, coupled with shrinking expenses by employing best practices culled from its 10 brands.

But, he said, if any competitor resorts to “super-aggressive pricing” to fill its ships, “then it can become a problem for the industry.”

Donald said travelers come to view the industry’s lowest prices as a gauge of how much they should pay for any cruise.

“People say, ‘I’m not going to go on that ship, but cruises only cost this much, and I don’t want to pay more than that because I don’t want to get ripped off.'”

On the other hand, he said, the upside of new capacity is more attention being paid to cruise products.

“It just allows them the opportunity to put cruise front and center, to help all of us close on [those] new to cruise,” he said.

MSC Cruises USA President Rick Sasso said that the real pricing stress this year has been in the Caribbean and that MSC wasn’t the initiator of the fare discounting there.

“It should not be a surprise to anybody that we’ve been successful and we’re going to continue to invest in our brand,” he said.

MSC to place two-ship order

By Tom Stieghorst

STX France has signed a letter of intent to build two 167,000-gross ton ships for MSC Cruises that would be delivered in 2017 and 2019, plus options for two more.

The long-rumored order would expand MSC’s fleet from 12 to 16 if all four ships are built.

MSC Cruises USA’s president, Rick Sasso, said at the Cruise Shipping Miami conference earlier this month that MSC was ready to increase its North American presence from a single year-round ship if an order was made.

A statement from the two companies said the contract will be binding “when the financial package is secured.”

The companies did not give a value for the order, but said the two ships would provide 16 million working hours for STX France and its subcontractors. STX France genial manager Laurent Castaing said a competitiveness agreement signed with trade unions was “decisive” in reaching the letter of intent to build the ships.

Each new ship will have 2,250 passenger cabins for a double-occupancy capacity of 4,500, but MSC put the ship’s capacity at 5,700 passengers. The ships “will be able to call in most of the ports and destinations on earth, without compromise,” MSC said,

MSC President Gianni Oronato said the ships will boast “new panoramic spaces, a bigger theater and a spectacular amusement park connected to an outdoor aqua park as well as a two-deck inside promenade.”

The MSC ships will have specially designed cabins for families and an extended Yacht Club luxury area on each vessel.

Castaing said negotiations for the ships were particularly challenging “in light of today’s global competitive landscape in the shipbuilding industry.”

The main creditor for the troubled Korean company that owns STX Europe said recently it would like to divest the European asset by June.