Thursday, August 4, 2011

The Ink Is Barely Dry On New Ship Orders For Costa & AIDA

Carnival Corporation didn't achieve its status as the largest cruise vacation group in the world by sitting on its laurels. With a portfolio of cruise brands in North America, Europe, Australia, and Asia, comprised of Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, Ibero Cruises, P-and-O Cruises (UK), and P-and-O Cruises (Australia), the brands under the Carnival Corp umbrella operate 101 ships totaling approximately 200,000 lower berths and now it has 10 new ships scheduled to be delivered between May 2012 and March 2016.

Carnival Corp announced yesterday that it has reached agreements for the construction of three new cruise ships—one 132,500-ton vessel for its Costa Cruises brand and two 125,000-ton ships for its AIDA Cruises brand. The ships will be the largest ever constructed for these two cruise lines. A contract has been signed with Italian shipbuilder Fincantieri for the construction of a 3,700-passenger ship for Costa that is scheduled for delivery in October 2014. The all-in cost for this vessel will be approximately euro 150,000 per lower berth. A memorandum of agreement has been signed with Japan's Mitsubishi Heavy Industries to build two 3,250-passenger ships for AIDA which are scheduled for delivery in March 2015 and March 2016. The all-in cost for these vessels will be approximately euro 140,000 per lower berth.

The order for the two AIDA ships marks a return by Carnival Corp to Mitsubishi Heavy Industries which built two highly successful ships for Princess Cruises, both of which were delivered in 2004. The contract with Fincantieri continues the company's longstanding and successful relationship with the Italian shipbuilder, which dates back nearly 20 years.

The AIDA order marks Carnival Corp's first new ship delivery for 2016 and continues the company's strategy of introducing two to three ships per year. Including the new orders for Costa and AIDA, Carnival Corp currently has 10 ships on order—three for 2012, two for 2013, two for 2014, two for 2015 and one for 2016. The delivery of the new Costa ship in fall 2014 is expected to replace capacity from the sale of certain older Costa ships beginning with the sale of Costa Marina, which will leave the fleet in Nov 2011.

The new Costa ship order is subject to financing. The memorandum of agreement with Mitsubishi Heavy Industries is subject to customary closing conditions, including execution of shipbuilding contracts and financing. Additional design and itinerary details for the three new vessels will be announced at a later date by Costa and AIDA.

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