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Articles from 2000 In December


No end to ex-Fair Princess legal battles this year

No end to ex-Fair Princess legal battles this year

A spokesperson for Slater & Gordon, the law firm seeking damages from respondent P&O Cruises Australia and crossdefendants Adventures in Paradise and Bluff Inn Motel on behalf of theclaimants, told Seatrade Insider last week all parties have signed consentorders extending the mediation process. Seatrade Insider also spoke tosolicitor Rachel Schutze of Maurice Blackburn Cashman, who is mounting apossible class action over an outbreak of what the NSW Department of Health diagnosed as influenza during two successive Fair Princess cruises between August 14 and September 10. Schutze said she is still gathering evidence and won't conclude her investigation until late January-early February next year.

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Aker Finnyards wins another hull section from Meyer

Aker Finnyards wins another hull section from Meyer

The outfitted hull section, including cabins, will then be towed to the German yard to become part of the 91,000gt as yet unnamed newbuild Meyer Werft is constructing for Star/NCL, due in October 2002. This is the second cruiseship hull section Meyer has subcontracted to Aker Finnyards. The Finnish builder is currently constructing a 100mtr long hull section for RCI's Brilliance of the Seas, which will be ready to tow to Germany next May. The 88,000gt vessel is due for delivery in July 2002.

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New Chinese cruise venture

New Chinese cruise venture

To be called China Sea Discovery, the 1,200 passenger vessel is the first operation of its kind to target mainland Chinese passengers. Monaco-based V Ships will manage the vessel, having secured full deck and engine, plus hotel management. V Ships' managing director Roberto Giorgi told Seatrade Insider the vessel will have European officers, Filipino ratings and around 100 Chinese amongst its 350 crew. Giorgi says 'the venture is very exciting: the vessel will be Chinese-speaking, offering ethnic cuisine and will be targetting a completely new customer base.' As first reported by SI in August, Emerald Cruises, whose ownership includes an international investment banking firm, together with Lake City Casinos and Great Canadian Casinos of Vancouver purchased Fair Princess from P&O for $15.5m. Since then the vessel has undergone a $10m refurbishment adding VIP casino and staterooms.

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Commodore files for Chapter 11

Commodore files for Chapter 11

Commodore will cancel cruises on the Crown Dynasty from Saturday and on Enchanted Capri and Enchanted Isle from Sunday. Passengers currently on board the vessels will be returned to their ports of embarkation. 'We deeply regret having to take this action, but we had no other choice,' says Commodore ceo Fred Mayer in a statement, adding that negotiations between the company's mortgage-holding lenders could not be resolved in time to avoid the shutdown. The statement pegs Commodore's troubles as starting with its day cruises from San Diego last spring on Enchanted Sun, calling the venture 'plagued by logistical difficulties and the passage of a state legislative referendum favouring land-based gaming, which had a negative impact on sales.' Although Commodore terminated the programme after just two months, it says the heavy costs associated with the project continued to affect its financial state. The Nasdaq halted trading of CCLN shares this afternooon; the last sale price was 5/32. Commodore's collapse following Premier's mid-September meltdown suggests that operating fuel-hungry 'vintage' ships in the current pricing climate can be a fatal endeavour.

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How(e)apos;s this for a cruise port with a difference?

How(e)apos;s this for a cruise port with a difference?

With her highest ice-class reinforced hull, Bremen has spent much of her 10 years of cruising in the Arctic and Antarctic seas. However, she's probably better known on Lord Howe Island than anywhere else. That's because she called there on her maiden voyage as Salen-Lindblad's Frontier Spirit and her arrival Christmas Day during an Australasian bird-watching safari marks the second cruise ship visit in 10 years. Port operations manager Clive Wilson, MBE, told Seatrade Insider the open-ocean transfer to this spectacular World Heritage listed island, surrounded by a marine park and billed as the last paradise, limits passenger capacity to around 150. Wilson promised Bremen's complement will receive a welcome to remember.

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Riviera Portsapos; unique MoU scheme

Riviera Portsapos; unique MoU scheme

Port of Nice is currently pressing ahead with major improvements that will include a multi-use passenger terminal plus five berths: a fair-weather transit berth and all-weather homeport berth for ships up to 300 metres in length; two berths for transits/homeporting of vessels up to 200 metres; and an additional berth for small cruiseships or large mega-yachts (as previously reported by SI 17/11/00). RPA requests that lines wishing to secure preferential berthing at the new facilities should make contact with Ports Managing Director Laurent Monsaingeon by January 15, 2001. The RPA says this will allow it to then draw up an MoU with each interested party 'which will effectively place the line in a preferential group for negotiations of berthing to begin in 2003.' Besides providing ship details, preferred days of call and anticipated passenger throughput, lines will be asked if they are 'willing to engage in a mid- to long-term passenger throughput agreement'. Opportunities to assist with financing of the improvements are available independently of the MoU scheme which is 'an equal opportunity to all cruise lines,' stresses the RPA.

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Carnival earnings drop reflects tough year

Carnival earnings drop reflects tough year

Carnival (NYSE: CCL) reported net income of $193.8m ($0.33 diluted EPS) on revenues of $850.3m for Q4, compared to net income of $251m ($0.40 diluted EPS) on revenues of $791.2m for the same quarter in 1999. The quarter's net income was reduced $24m ($0.04 EPS) by several nonrecurring items, including a $42m charge for the company's equity interest in restructuring and other nonrecurring charges recorded by Airtours and a $21m litigation-related charge partially offset by a $12m gain on currency hedging related to the acquisition price of Costa, plus a $27m deferred income tax benefit resulting from Costa's change in tax status for joining the Italian International Ship Registry. Net income was also reduced by lower operating earnings at Airtours and higher net interest expense, mainly from the company's repurchase of common stock. Net income for the year was $965.5m ($1.60 diluted EPS) on revenues of $3.78bn, compared to net income of $1.03bn ($1.66 diluted EPS) on revenues of $3.5bn for fiscal 1999. The company's cruise operating income increased in the final quarter to $187.2m from $174.1m in Q4 '99. Carnival chairman Micky Arison notes that 'despite continued pressure on cruise pricing, resulting in slightly lower net revenue yields, and higher fuel costs, we were still able to grow our cruise operating earnings during the fourth quarter.' During 2000 Carnival introduced an unprecedented four new ships (CostaAtlantica, Carnival Victory, Amsterdam and Zaandam) and carried a record 2.7m guests, a 12.8% increase over fiscal '99. And the company increased occupancies to 105.4% from 104.3%. Carnival's earnings report emphasises the company's Europe expansion via the Costa brand and notes this business experienced significant revenue yield growth in 2000. Looking to 2001, Arison says the delay in the addition of 350 cabins to CostaClassica and lower earnings expected from Airtours, less a gain from the settlement of a dispute with Azipod manufacturers, are expected to reduce earnings for 2001 by approximately $.03 per share. The Carnival chairman also notes that advance bookings are ahead of where they were last year at this time, although cruise ticket pricing remains challenging. He specifies that bookings for the contemporary and premium segments are in line with expectations and foresees a return to earnings growth in full fiscal year 2001.

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Coming soon: another BRB for Imperial Majesty?

Coming soon: another BRB for Imperial Majesty?

Imperial president Arthur Pollack tells Seatrade Insider: 'We do have plans to expand the fleet and one of the vessels under consideration is Oceanic, but nothing is confirmed yet.' Asked about temporarily using Big Red Boat II, he responds, 'There's a possibility of that also.' (He declines to identify other tonnage under consideration.) At 1,800 berths, Oceanic would make a substantial boost in capacity for Imperial Majesty. But with the 984-passenger OceanBreeze sailing full - occupancies are projected at 118%-120% through August - Pollack is confident the line can absorb more beds. Rates for the two-night sailings to Nassau currently start at $149 per person and range up to $899.

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All eyes on the wave

All eyes on the wave

In a new report by Lazard Freres, Jim Winchester observes that major lines across the board are currently quoting higher prices for the first and second quarters of 2001. However, it's booking activity during January/February that will determine whether pricing will stick. 'If you're asking me how the wave is going to go, I would have to say the industry has a lot more riding on the wave this year than they may like,' Winchester tells Seatrade Insider. While he says it's too early for a definitive read on pricing, the Lazard analyst forecasts continued deep discounts in the face of significant capacity expansion and an effort to maintain 100%-plus occupancy. 'Perhaps as much as 60%-70% of bookings for 2000 were taken in before the price collapse hit in April/May,' Winchester recalls. 'Consequently, yields are expected to average out at a lower level for the year, although we are not expecting the shock wave collapse in pricing that occurred in 2000 to be repeated this spring.' Who's best positioned coming into 2001? Extensive research, including interviews with key travel groups, coupled with today's Carnival Corp. year-end report, indicates to Winchester that 'Carnival really has played their cards well this time. They got out there early and built a large book of business. They beat the rest of the pack to the punch, at least in the first quarter.' (Lazard rates Carnival Corp. outperform with a price target of $28; Royal Caribbean is rated hold and P&O Princess is unrated.) The issue now, as the Nasdaq plunges, retailers report sluggish holiday sales and homeowners get socked with big winter fuel bills is: how well will the wave carry Carnival (and other lines) through the second quarter of 2001 and beyond?

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NCL: Leo will operate despite gaming ban

NCL: Leo will operate despite gaming ban

NCL today issued a release expressing its disappointment about the bill: 'The commentary accompanying the legislation gives the unfortunate impression that gambling and gaming activities are a primary focus of modern cruise ships as well as the ship NCL intends to deploy on its Hawaii/Fanning Island itinerary. As the travel agent community and the travel industry are well aware, gaming activities are just one of the many entertainment options NCL offers its passengers.' The statement goes on to list a variety of Norwegian Leo diversions including eight restaurants, shows, music, sports, spa, etc. 'NCL believes its introduction of the Norwegian Leo to Hawaii as the newest, most modern and largest cruise ship in the Hawaiian trade offers consumers a cruise alternative never before available in the Hawaiian market,' says the release. 'The company remains firmly committed to Hawaii and will develop this market for consumers using a combination of innovative, ultra-modern ships and orthodox, old-fashioned competition.'

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