Steel Cut for New Costa Smeralda LNG Ship

New Costa Ship Rendering

Construction work began today on the Costa Smeralda, including her steel-cutting ceremony held at the Meyer shipyard in Turku, Finland.

The new Costa Cruises ship will be the brand’s first ship powered by liquefied natural gas (LNG) and the world’s first cruise ship to be broadly marketed to consumers from multiple countries throughout Europe, the Italian cruise line said.

The Costa Smeralda, which will enter service in October 2019, will exceed 180,000 gross tons and offer more than 2,600 passenger cabins, the company said.

A second ship, sister to Costa Smeralda, will be delivered by Meyer Turku in 2021.

Neil Palomba, president, Costa Crociere

“These ships will strengthen the leadership position for the Costa Group, which is already the market leader in all the major continental Europe markets,” said Michael Thamm, CEO of the Costa Group and Carnival Asia. “The multibillion dollar contract with Meyer, which also includes two new LNG-powered ships to be built for our German brand, AIDA Cruises, reflects our strategy of constantly innovating our vacation offerings and providing our guests with an unmatched cruise experience.”

“The two new Costa Cruises ships are a true global innovation and set new standards for the entire sector,” added Neil Palomba, president of Costa Cruises. “They will be among the first cruise ships powered by LNG, spurring the development of this green technology, especially in the Mediterranean area, and they will be the world’s first LNG-powered ships that will be marketed to consumers from multiple countries, including Italy, France, Spain, Germany and Switzerland. The new ships will also offer unique services and present a state-of-the-art interior design, serving as the perfect expression of our Italy’s Finest concept, which is a distinguishing feature of the Costa Cruises brand around the world for providing guests with a truly immersive Italian experience.”

“In the last two years, we have had a very intense design collaboration with our customer and the outcome is a really fresh and new design fused with the latest of technology. We are happy to bring our experience with building LNG powered passenger ships to bear. Today is a very special moment in shipbuilding, when all the ideas, creativity, technology and signature design that is going into Costa’s new ships, are finally starting to become reality,” stated Jan Meyer, CEO of Meyer Turku.

The Costa Smeralda will be offering cruises in Western Mediterranean, sales open early 2018.

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Steel Cut for New Costa Smeralda LNG Ship

New Costa Ship Rendering

Construction work began today on the Costa Smeralda, including her steel-cutting ceremony held at the Meyer shipyard in Turku, Finland.

The new Costa Cruises ship will be the brand’s first ship powered by liquefied natural gas (LNG) and the world’s first cruise ship to be broadly marketed to consumers from multiple countries throughout Europe, the Italian cruise line said.

The Costa Smeralda, which will enter service in October 2019, will exceed 180,000 gross tons and offer more than 2,600 passenger cabins, the company said.

A second ship, sister to Costa Smeralda, will be delivered by Meyer Turku in 2021.

Neil Palomba, president, Costa Crociere

“These ships will strengthen the leadership position for the Costa Group, which is already the market leader in all the major continental Europe markets,” said Michael Thamm, CEO of the Costa Group and Carnival Asia. “The multibillion dollar contract with Meyer, which also includes two new LNG-powered ships to be built for our German brand, AIDA Cruises, reflects our strategy of constantly innovating our vacation offerings and providing our guests with an unmatched cruise experience.”

“The two new Costa Cruises ships are a true global innovation and set new standards for the entire sector,” added Neil Palomba, president of Costa Cruises. “They will be among the first cruise ships powered by LNG, spurring the development of this green technology, especially in the Mediterranean area, and they will be the world’s first LNG-powered ships that will be marketed to consumers from multiple countries, including Italy, France, Spain, Germany and Switzerland. The new ships will also offer unique services and present a state-of-the-art interior design, serving as the perfect expression of our Italy’s Finest concept, which is a distinguishing feature of the Costa Cruises brand around the world for providing guests with a truly immersive Italian experience.”

“In the last two years, we have had a very intense design collaboration with our customer and the outcome is a really fresh and new design fused with the latest of technology. We are happy to bring our experience with building LNG powered passenger ships to bear. Today is a very special moment in shipbuilding, when all the ideas, creativity, technology and signature design that is going into Costa’s new ships, are finally starting to become reality,” stated Jan Meyer, CEO of Meyer Turku.

The Costa Smeralda will be offering cruises in Western Mediterranean, sales open early 2018.

Is a shipbuilding duopoly good for the cruise industry?

In the modern facilities, the most technologically sophisticated cruise ships are being built.
 
Before the end of 2017, it looks like there will be a worldwide duopoly in the business of building cruise ships. Can this be good for cruise lines, their customers or travel agents?
It would come about if Italy’s Fincantieri buys the French shipyard in Saint-Nazaire where Royal Caribbean International’s Harmony of the Seas, and a string of other ships, have been built. (Fincantieri won’t buy all of the Saint-Nazaire yard. The French government will hold onto a one-third stake.)
The yard is currently operating under the name STX France, but the STX parent company, based in Korea, has been trying to sell it to consolidate its way out of financial trouble.
A South Korean court recently approved Fincantieri as the approved bidder.
STX already sold its yard in Turku, Finland, to Germany’s Meyer Werft, the other big name in cruise ship building. Together, Fincantieri and Meyer Werft would dominate cruise shipbuilding the way Boeing and Airbus control the world’s output of commercial jetliners. (Fincantieri has built almost all of the recent Carnival Corp. brand vessels while Meyer Werft has delivered most of Norwegian Cruise Line’s latest ships, among others).
The business of building jets and cruise ships is similar. Both are capital intensive businesses, with a need for specialized labor and a network of subcontractors. Both are subject to wicked swings in the business cycle that can leave them with either more work than they can handle or none at all.
Big cruise lines spend billions of dollars annually on new ships. Yet it is telling that there were no bidders other than Fincantieri for the French yard. It is a very specialized and risky business.
Does it matter to the cruise lines that there are only two suppliers left to do business with?  It doesn’t seem to matter much to the airlines, who haven’t been cornered by the Airbus-Boeing duopoly. One difference may be that there are dozens of customers for the plane makers, but less than a dozen for cruise yards.
Image result for fincantieri
Fincantieri’s yard in Trieste. Credit: Fincantieri
One well-informed source in the industry rated Fincantieri’s takeover of STX France as “neutral to slightly negative” for cruise operators. The reduction in negotiating partners is a negative, while the stability of having the yard in the hands of a familiar, known entity somewhat offsets that.
There are some other players in the shipbuilding game. Genting Hong Kong bought several German yards, which will build the future ocean and river ships for Crystal Cruises, the line Genting acquired in 2015, and the Chinese government, which has partnered with Fincantieri to begin building ships in China.
Neither poses much of a current threat to the duopoly. So for the foreseeable future, if you want to build a big cruise ship, the choices are Meyer Werft or Fincantieri.
Let’s hope it doesn’t mean anything negative for the cruise lines or their travel partners.