In sharp contrast to gloomy forecasts made at the beginning of the year, 2014 has proved a fruitful period for new cruise ships, with five major vessels contracted worth a total of more than US$5 billion in the first six months alone. But it was several further orders in July and August that really caught the industry’s attention.
In March, MSC Cruises contracted two prototype ships of 167,500gt and 4,500 berths each at the STX shipyard in France, which built all but one of its current fleet of 12 ships.
Just two months later the same company was in the news again, generating further headlines with its order of two more big ships of 154,000gt and 5,300 berths at the Fincantieri shipyard in Italy – the Seaside class. For a privately-owned company, MSC Cruises, part of the huge Mediterranean Shipping cargo shipping group, has always been remarkably open about its investments – and this is no exception.
The orders from the two yards are linked, according to CEO Gianni Onorato. “The Fincantieri contract is the last piece of the company’s industrial plan to double the capacity of our fleet by 2022. With the arrival of these new ships we will reach a capacity of 80,000 passengers a day. Our total plan is worth over €5 billion, which includes newbuilds and also the conversion of four ships already in the fleet,” he says.
Technical innovation will enable the Seaside ships to reduce fuel consumption by another 25% and safety features go beyond what is required by international regulation, says Onorato. “A feature is a sea-level promenade that circumnavigates the sides of the ship with shops, restaurants and outdoor spaces,” he adds.
The Fincantieri ships, worth €700 million each, will be delivered in November 2017 and in May the following year. There is an option for one more ship. The slightly larger STX vessels, also worth about €700 million each and the largest for a European owner, have delivery dates of 2017 and 2019 and an option for two more vessels. Work will not start on the STX ships until next year. The vessels, crucial to the survival of the French shipyard, were only agreed after a protracted negotiation in a difficult trading environment.
STX shipyard general manager, Laurent Castaing, says success was only achieved because of a labour agreement with normally intransigent French trade unions, which cut labour costs by 5% and enabled STX to meet the MSC demand for a price cut. MSC executive chairman, Pierfrancesco Vago, says: “Once again our longstanding partnership with the STX yard has proved the key for these plans. The new (STX) ships will expand fleet capacity by 31%.”
Another valuable order for STX came when Royal Caribbean International decided to build a fourth Oasis-class ship – another in the largest series of cruise ships in the world, at 225,000gt with 5,400 lower berths and worth US$ 1.2 billion each. The company let an option for this vessel lapse last November, but the order was nevertheless widely expected. The time gap between the second and third vessel, also building at STX, will be about six years so changes are expected between the first two and second two ships. The third Oasis ship will be 2.1m longer and 5.5m wider than the second. It will have 64 more beds.
In a surprise move in July, Norwegian Cruise Line ordered two more Breakaway Plus ships from Meyer Werft for a total investment of €6 billion, with deliveries in 2018 and 2019. This makes six ships in the Breakaway Plus class. “Breakaway and Getaway (the original series ships) have proved game changers in the industry,” says CEO Kevin Sheehan. “We build on their success with this new ship order which solidifies our long-term growth strategy.” Analysts point out that the two ships are 15% per berth more expensive than their earlier two class sisters now being built.
In the first week of August, TUI Cruises also caught the industry unawares with the announcement that, in addition to the under-construction Mein Schiff 4, it would expand its fleet to six ships by 2017 with the order of two more ships. Both will be built at the STX shipyard in Turku, Finland, which, if approval goes ahead for the recent restructuring announcement, will be under 70% ownership of Meyer Werft and will be renamed Meyer Turku Shipyard. When the plans were revealed, Richard Vogel, CEO of TUI Cruises, said: “We are pleased that a positive outcome of the negotiations between STX and Meyer Werft has been achieved. This step ensures that TUI Cruises keeps the valuable know-how of the shipyard. It is the foundation to successfully enlarge the unique cruise products of the Mein Schiff fleet.” Vogel announced in the summer that he would be leaving the company.
Princess Cruises also announced a newbuild in July, saying it is paying €600 million to Fincantieri for a new 3,560-berth ship. Parent Carnival Corporation says this will be its last new ship for delivery in 2017.
The 3,600-berth Britannia will account for 24% of P&O Cruises’ raised capacity when she comes into service next March. Marketing director Christopher Edgington, the man tasked with filling the new ship, is bullish: “By 2016 I strongly suspect this ship will have helped the UK market grow very close to the two million passenger mark that has been in our sights for several years now,” he says.
Carnival UK CEO David Dingle, who since last year has also looked after P&O on a daily basis, is slightly more equivocal. “If you had told me two years ago in the middle of the recession that I had to fill this new ship I would have felt slightly uncomfortable. But now with a pick-up in the economy there is a feeling of confidence in the timing.”
Britannia has the same basic hull design as Royal Princess, introduced last year, and her sister, the 3,600-berth Regal Princess, completed earlier this year with little publicity by Fincantieri. “But there are one or two additions to the latest Princess ship: an extra aft pool and access to the exterior promenade on deck 7, enabling passengers to walk the length of the ship,” says Rai Caluori, EVP fleet operations for Princess Cruises.
This article appeared in the Autumn/Winter 2014 edition of International Cruise & Ferry Review. To read the full article, you can subscribe to the magazine in printed or digital formats.