Vessel Performance Key to Secondhand Ship Market for Carnival

Oriana

Carnival Corporation has sold 28 ships since 2006, averaging around two ships per year based on demand in the market.

That number was up in 2018, with the company announcing the exit of four ships overall.

The Pacific Eden was sold to Cruise & Maritime Voyages while the Pacific Jewel will head to Indian start-up Jalesh Cruises.

Holland America Line sold the Prinsendam, which will become the Amera next summer for Phoenix Reisen.

P&O Cruises UK also announced the Oriana will leave the fleet in 2019.

“The practical reality for us is if the ship is relevant to our guests and is delivering a double-digit return on invested capital … we have to invest more in that ship over time. We’ll continue with the ship in the fleet if it’s relevant to the guests and his earning is key if it’s not then the ship will be gone,” said Arnold Donald, president and CEO, on the company’s year-end and fourth quarter earnings call.

The secondhand cruise ship market has historically been highlighted by two to three nine- to eight-figure transactions on an annual basis, according to the Secondhand Market Report by Cruise Industry News.

“And so in terms of there being a robust secondary market, there’s no question, the secondary market has an opportunity not only because the IMO regulations but simply because the ageing of ships that are in the secondary market,” Donald added.

Donald said many operators in the secondhand market were sailing ships that are 40 to 45 years old, and those vessels will need to be replaced.

“So there should be a market for a number of the ships. But at the same time, to drive earnings and return on invested capital, if we had a need to scrap for ships, in a nutshell, we would do that. We don’t see that at this point in time. But if it came to that, we have no problems doing that,” Donald continued.

“But we’re not going to hold onto an underperforming asset, because we’re not able to sell it. I mean, if – we would scrap it if we had to. I don’t anticipate that, but if we had to do it, we would do it.”

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Zen Cruises to Start in India with Pacific Jewel

Pacific Jewel

Another new cruise line is entering the fold as Zen Cruises announced today it had purchased the 1990-built P&O Pacific Jewel and intends to start service in 2019 out of India.

The cruise brand is owned by Essel Group, which describes itself as a “multi-faceted business conglomerate, with a legacy of over 90 years.”

The company today announced the appointment of industry veteran Jurgen Bailom as President and CEO of the Group’s upcoming cruise line business, Zen Cruises Private Limited.

“Bailom will steer the company on a course to captivate Indian cruise passengers with an offering par excellence,” the company said.

The Pacific Jewel entered service in 1990 as the Crown Princess after being built by Fincantieri. It also served as the A’Rosa Blu, AIDAblu and Ocean Village Two before moving to P&O Australia as the Pacific Jewel in 2009. It will wrap up its service career with P&O in March.

Bailom was previously at the head of Grupo Vidanta Cruises prior to Essel Group. He has also held senior corporate director positions within several of Royal Caribbean’s brands.

“I’m thrilled to be a part of the Essel Group which has done pioneering work across sectors and consider it a great opportunity to be at the helm of India’s first cruise company. India has a 6,632 km long coastline along nine states and two union territories which presents the tremendous potential to promote and grow cruise tourism in India. We intend to take the cruise liner experience to a new level for people in India, and I look forward to unveiling our plans soon,” Bailom said.

No further information was released.