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Articles from 2004 In January


Carnival replaces Seward with Whittier

Carnival replaces Seward with Whittier

The move follows that of sister line, Princess Cruises. Both brands will use Whittier's new cruise facility.

Carnival said the shift to Whittier will save passengers 90 minutes of travel time from the airport at Anchorage; the trip to Seward took about three hours by motorcoach. Using Whittier as an embarkation point for southbound cruises also allowsfor a longer eight-hour stay in Sitka, the first stop on that itinerary, Carnival said.

Seven-day northbound Alaska cruises on the 2,124-passenger Carnival Spirit will continue to depart from Vancouver.

Carnival Spirit's Alaska season consists of 16 seven-day Glacier Routeand three Glacier Bay voyages. Glacier Route cruises depart May 19 to Sept.1, southbound from Whittier or northbound from Vancouver. Cruises inboth directions feature Prince William Sound, College Fjord, Lynn Canal,Juneau, Skagway, Ketchikan, Sitka and the Inside Passage.Glacier Bay cruises sail roundtrip from Vancouver May 12, Sept. 8 and 15and offer Glacier Bay National Park and the InsidePassage, as well as visits to Juneau, Skagway and Ketchikan.

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UBS, AGE raise Royal Caribbean estimates

UBS, AGE raise Royal Caribbean estimates

As reported, the company now projects net revenue yields to climb 5% to 7% in 2004.

UBS Warburg raised estimates yesterday morning before the call, suggesting that the numbers could go higher afterward -- and they did. Late Thursday, UBS slightly raised its forecast of net yield in 2004 to a gain of 5.8%, pushing its estimate for RCL to $2.19 from $2.10 in the morning and $1.87 prior to Thursday. The 2005 estimate goes to $2.52 from $2.39 in the morning and $2.14 prior. Analyst Robin Farley points out that Royal Caribbean allows for an even higher EPS up to $2.30 in 2004.

'We believe the big driver in '04 yield performance is recovery, not growth,' Farley writes in a research note. 'If net yields were to increase 5.8% in '04, that would still be roughly 5.5% below '00 yields. In our view, that leaves room for more upside either this year or in '05.' Currently, UBS's 2005 estimate assumes a more normal growth pattern of less than a 1% uptick in yield, but Farley advises that recovery could add to that. UBS calculates that every percentage point increase in yields could add roughly 16 cents per share to RCL.

A. G. Edwards revised its 2004 EPS estimate to $2.82 from $2.23 and its '05 number to $2.86 from $2.38. Price objective goes up a dollar to $45.AGE projects a 2.3% increase in yield for 2005.

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Festival negotiating a restructuring plan

Festival negotiating a restructuring plan

According to a release from the troubled Genoa-based company, the move is part of a restructuring plan which is currently being negotiated with banks. 'Negotiations could have a positive outcome in the first half of February,' Festival says.

Meanwhile the cruise operator claims a second victory in the legal fight opposing ALSTOM and Credit Agricole over the arrest of Mistral, European Vision and European Stars. After the positive ruling in Marseille (see Seatrade Insider 28/01/2004) according to Festival, a court in Barbados has denied the right of a representative for ALSTOM and Credit Agricole to repossess the European Vision.

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Caribeapos;s next cruise cancelled

Caribeapos;s next cruise cancelled

The 500-passenger ship, on long term charter to Festival, was the last ship in its operating fleet still cruising. It is unlikely that Caribe will re-commence her 8-night itineraries in the Caribbean until the company has found a solution to its current problems.

Five Festival ships are under arrest and a sixth, Azur, is headed for lay-up in Gibraltar. Seatrade Insider understands the ship is scheduled to arrive at the Rock on Monday.

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Legality of $100 Alaska head tax raised

Legality of $100 Alaska head tax raised

HB 207, sponsored by Rep. Carl Gatto, is a holdover from last year's legislative session.

'The time has come for the cruise ships to pay an appropriate share for the services they and their passengers enjoy, services upon which the industry and passengers have become dependent while using Alaskan ports and waters,' said Gatto, a Republican from Palmer.

Proceeds of the tax would go to the state's general fund. Opponents question the legality of taxing cruisers to pay for a budgetary shortfall as no revenues are directed to cruise-related functions or services.

Gatto believes Alaska does have the legal right to impose such taxes under the Tonnage and Commerce clauses as well as the Maritime Security Transportation Act 'based on several factors including the cost of services provided and the minimal burden imposed on interstate commerce.'

The North West Cruiseship Association (NWCA) and a dozen other opponents of the bill from around the state appeared to testify at this week's committee hearing. John Hansen, president of the NWCA, told Seatrade Insider it is appropriate to consider the bill's legality now or the state could potentially face litigation in the future. Hansen did not know when the subcommittee will report back on the legality of HB 207, adding, 'But for now, we're happy to see it's gone.'

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Good enviro report for big Alaska ships

Good enviro report for big Alaska ships

That's the verdict of the annual 'Assessment of Cruise Ship and Ferry Wastewater Impacts in Alaska' issued this week by the Alaska Department of Environmental Conservation.

'It's a really good report card so we're delighted to see it,' says John Hansen, president of the North West Cruiseship Association. 'It basically said that we're really doing well.'

In 2003, all large cruise ships that discharged wastewater in Alaska were equipped with advanced treatment systems. The systems produced wastewater that met Alaska Water Quality Standards for most tested pollutants at the end of pipe, according to the report. After applying a conservative dilution factor, state standards were met in receiving water for all tested pollutants.

'Whole Effluent Toxicity (WET) testing in conjunction with dilution estimates indicate that effluent from ships with advanced wastewater treatment systems do not pose a risk to aquatic organisms, even during stationary discharge,' the report said. 'No tested pollutant is present in concentrations that cause risks to human health.'

However, concerns were raised about small cruise ships (defined as carrying between 50 and 249 passengers) as well as Alaska Marine Highway system ferries that use traditional blackwater treatment, not advanced systems. Small vessels had been given extra time to comply with the state's wastewater discharge limits and in 2004 may submit a plan that further extends the time for compliance. The plan must detail the steps being taken to limit the adverse impacts of discharges.

The full report is at: www.state.ak.us/dec/water/ under 'Quick Links.'

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RCL yield outlook lifts stocks

RCL yield outlook lifts stocks

However, the company's enthusiasm is tempered by expectations of higher expenses in 2004, largely due to rising fuel costs.

RCL shares reached $40.95 shortly before midday in New York, a gain of $2.06, after earlier trading up to $41.25, a 52-week high. CCL was at $44.38, up $1.64, after trading earlier to $44.85, also a 52-week high.

Meanwhile, Royal Caribbean chairman and ceo Richard Fain was telling analysts on the morning's earnings call that the company has seen 'a steadily improving market after the last call.' Royal Caribbean has begun raising pricing while maintaining its booking volume.

Call volume has been up 17% in January and gross bookings up 22% on an 11% capacity increase, according to Jack Williams, president of Royal Caribbean International/Celebrity Cruises. Seven-night Caribbean itineraries, Alaska and Europe are particularly strong.

For seven-night Caribbean, booked load factor and pricing are 'well ahead' and 'quite ahead,' respectively, while on short Caribbean routes, booked load factor is 'ahead' and pricing 'slightly higher.' Williams described Alaska as 'very, very strong,' with booked loads 'well ahead' and pricing higher on both roundtrip and open-jaw routes. 'Europe is a very, very good story,' he added, with sufficient demand to push 'broad price increases across all European sailings.' Williams described Europe as stronger now than at any time since 9/11.

Before the call, UBS Warburg raised estimates on both Royal Caribbean and Carnival. 'On same-brand and currency basis, we're assuming greater core recovery for RCLthan CCL, consistent with what we hear from the trade,' wrote analyst Robin Farley in a research note. UBS's Royal Caribbean estimate for 2004 goes to $2.10 from $1.87 and for '05 to $2.39 from $2.14. Farley said estimates might go up as management guidance allows for even higherEPS, an '04 range of $2.10-$2.30. Her new estimate pushes RCL's price target to $48 from $43.

UBS raised its yield increase projection for CCL to 5.4% from 4% and its 2004 EPS estimate to $2.24 from $2.12 and for 2005 to $2.63 from $2.54. Target price goes to $50 from $48.

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Ultra Voyager 2 update

Ultra Voyager 2 update

On today's earnings call, management was asked: if that option were extended, would it push the 2007 delivery date back?

Royal Caribbean never likes to consider taking up an option 'before we get to the option expiration date,' responded chairman and ceo Richard Fain. The option is denominated in euros and, as Fain noted, 'The euro has really moved since we placed a firm order for Ultra Voyager 1.'

During the week in September that Royal Caribbean triggered that order, the euro was at one of its lowest points against the dollar in recent months: at about $1.08-$1.10. Today, the euro closed at $1.24 -- some 10%-12% higher than in September.

When an analyst questioned at what level the euro would have to be to make the Ultra Voyager 2 option more affordable, Fain declined to specify but added, 'At this time, she's a very expensive ship.'

During another point in the call when a question was asked, no one immediately responded. After a short delay, Fain said (quipped?): 'Sorry, Kvaerner Masa's on the phone here.'

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Maasdam gets grill, concierge lounge

Maasdam gets grill, concierge lounge

Holland America president Stein Kruse said the reservations-only Pinnacle Grill and the concierge-staffed Neptune Lounge have received 'overwhelmingly positive feedback' from guests on other ships.

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Bolero and Flamenco arrested

Bolero and Flamenco arrested

'The ships are under arrest', said press manager Laura Gilli stating that 'the two ships have been brought to Gibraltar upon request by our lenders.'

Gilli also confirmed Azur is heading to Gibraltar too as requested by the lenders. 'But I can't say whether she'll be arrested too', she added.

Bolero and Flamenco are currently tied up at the Cammell Laird shipyard. 'Bolero is to be shifted today or tomorrow to the Detached Mole and Flamenco to Coaling Island ,' Tony Davis, chief executive of Gibraltar Port Authority told Seatrade Insider.

Festival also operates Caribe under a long term charter; this ship is reported to be sailing on her regular cruise programme in the Caribbean.

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