Confidence confirmed by further orders

Cruise companies confirm their confidence in the future by continuing to expand their operations, particularly in the Caribbean.

According to figures compiled by G P Wild (International) for the last quarter of 1999, the main growth area for cruise ship berth capacity continues to be the East and West Caribbean. This now has a total of 95,531 berths available in the region during the main cruising season.

During last year 122 ships were deployed in the Caribbean, providing a total of 2,032 cruises. Of these vessels, 67 were operated by the major players in the region, namely Carnival with 13 wholly-owned ships; its associated companies (excluding Airtours) 21 ships, including Holland America Line?s ten vessels; Norwegian Cruise Lines? seven vessels; 11 P&O ships; and the RCI companies had 15.

This year a total 142 ships are scheduled to be deployed in the area. In subsequent years this number is set to increase further as more ships come on stream. At the end of last year, there were 53 cruise vessels on order, due to enter service between the start of this year and 2004 and these will bring with them an extra 92,306 lower berths. This figure represents cruise ship berth capacity worldwide, but again the Caribbean is set to take the lion?s share of the total. And the trend continues, as further orders have been placed.

There is a nagging feeling among cruise industry watchers that all this extra capacity will cause an oversupply problem. Their doubts were given an airing by an unexpected source recently when Gerald Cahill, chief financial officer for Carnival was reported as saying that bookings were lagging behind capacity increases, resulting in the appearance of discounting. Institutional investors and Wall Street took note of Mr Cahill?s comments and promptly knocked around $6 billion off the value of Carnival shares.

On the premise that one person in an industry sneezes and everyone catches a cold, the resulting loss of market confidence resulted in P&O?s stock value dropping by $1 billion to $7.99 billion, while Royal Caribbean saw $1.3 billion disappear, leaving it with a figure of $6.4 billion.

However, the major cruise lines express their confidence in a profitable future for their businesses by continuing to commit vast amounts of money in newbuilding programmes.

Recent orders and deliveries

Examples of this confidence are not hard to find. In late February, P&O announced that it has signed a contract with Mitsubishi Heavy Industries Ltd (MHI), Japan for the construction of two 113,000g, 2,600 berth cruise ships. These are the largest cruise ships ever ordered by the P&O Group and the first to be ordered from MHI. P&O has not disclosed the exact contract price per vessel, but has hinted that it is not dissimilar to the cost of Grand Princess, namely $450 million.

The ships are for the Princess Cruises fleet and are due for delivery in July 2003 and May 2004 respectively. They are part of an expansion programme which will double the size of the Princess fleet over the next five years and will support the expansion of Princess into the Caribbean.

Power generation will be provided by four medium-speed diesel engines driving alternators, plus one alternator driven by a gas turbine, providing a total output of 25MW. P&O says that no decision has yet been made on the supplier of the diesels and the gas turbine. Electric propulsion motors will drive conventional shaft lines

An unusual feature of the arrangement is that the turbine will be installed in the funnel. This enables better space utilisation, allowing a wider range of public rooms and on board facilities to be introduced. Three bow and three stern thrusters will be installed for enhanced manoeuvrability.

A further key feature will be the incorporation of the latest environmental concepts. These will include low emission propulsion systems and the latest waste treatment technology.

These two ships form part of a six-part order programme for Princess Cruises, first announced on June 22 1999. The ships will be built in MHI?s main Akanura yard in Nagasaki, necessitating conversion of the yard?s 80,000 dwt capacity slipway into a 350m x 80m workshop/warehouse for the construction of cabins, and storage of equipment.

P&O Cruises and Princess Cruises

The introduction of P&O?s 76,000g, 1,878 passenger Aurora in April increases capacity in the UK cruise market by 37 per cent. The 77,000g, 2,342 passenger Ocean Princess which entered service at the end of January added 12 per cent to capacity on Princess Cruises.

The diesel-electric propulsion system comprises four MAN B&W 14V4860 diesels with a total output of 58,800kW (78,820 bhp), providing a cruising speed of 24 knots.

Lower bed passenger capacity on Princess Cruises? Ocean Princess is 2,342 in 1,011 cabins, of which there are 597 outside, 410 with balconies. A maximum speed of 22.4 knots is provided by a 46MW diesel electric system comprising six 11,520kW Sulzer 16ZA49S engines powering two 14 MW propulsion motors, each driving a shaft line and CP propeller.

The 77,000g vessel is the fourth and last in the Grand Class series built for Princess Cruises by Fincantieri?s Monfalcone yard.

Holland America Line, part of Carnival Corporation, has taken up two of three options which were part of an original order worth $800 million for two 84,000g vessels won by Fincantieri?s Marghera yard last November,following the breakdown of negotiations between the owner and Samsung, South Korea. The additional two vessels will be the same as the original order, namely panamax cruise ships to carry 1,800 passengers.

Propulsion power will be provided by a diesel electric plant, comprising five Sulzer ZA40 diesels driving alternators, plus an LM2500 gas turbine-generator set, operating in parallel with one or more of the diesel generators on board. This configuration will allow the vessels to operate in environmentally sensitive areas using clean gas turbine power. The plant will power Azipod propulsion units for greater manoeuvrability and enhanced operating efficiencies.

Each LM2500 will operate approximately 2,500 hours per year fueled by MDO. Each gas turbine will be arranged with a low-pressure waste heat boiler tapping into the ship?s steam system

The new 84,000g vessels will cost approximately $400 million each and will be constructed at Fincantieri?s Marghera shipyard in Venice, Italy.

HAL has just taken delivery of its latest panamax newbuilding, the 61,000g, 1,420 passenger Zaandam, from Fincantieri. Sister vessel Volendam was delivered by the yard last October.

Machinery consists of a diesel electric power plant comprising five medium-speed four-stroke Sulzer 12ZAV40S diesels, each with an MCR output of 8,640kW at 514 rev/min. Each engine drives a three-phase synchronous 10,500 KVA alternator, provide power at 6.6kW, 60Hz. The ship is propelled by two 13MW synchronous main electric propulsion motors designed for synchro-converter control with a rated speed of 130 rev/min at 15.17Hz, each driving a shaft line with a CP propeller. Service speed is 20.2 knots, at 85% MCR, with a 20% sea margin, and one engine off.