Celebrity Cruises orders pair of 2,900-passenger ships

Posted on 8 December, 2014 by Spacejunkie2

By Tom Stieghorst

Celebrity Cruises said it has ordered two 2,900-passenger ships from the STX France shipyard in St. Nazaire.

The ships are scheduled for delivery in the fall of 2018 and early 2020.

Celebrity’s most recent ship, the 3,046-passenger Celebrity Reflection, was delivered in the fall of 2012.The line recently agreed to send its oldest ship, Celebrity Century, to a new joint venture in China.

Celebrity’s parent, Royal Caribbean Cruises Ltd., said the ships are being built under the Project Edge name. RCCL said they will deliver small-ship itineraries with large-ship amenities.

“STX France designs and builds some of the most innovative and stylish cruise ships in the world, and Project Edge offers them the opportunity to again set a new standard for modern iconic architecture,” said Michael Bayley, presdient and CEO of Celebrity.

Contract costs for the ship were not disclosed. With the addition of the two new orders, RCCL said company-wide capacity is scheduled to increase by 2.4% this year, 5.5% next year, 6.7% in 2016, 3.8% in 2017 and 4.3% in 2018.

The 117,000-gross-ton ships will be part of a new class of vessels for Celebrity. the line currently operates five Solstice-class vessels, including Celebrity Reflection, and four Millennium-class vessels.

Celebrity competes in the premium segment with Holland America Line, which has a 2,650-passenger ship called Koningsdam under construction for delivery in February 2016.

Learning from RCCL’s cruise line partnerships

Posted on 28 October, 2014 by Spacejunkie2

By Tom Stieghorst

Forming partnerships to operate cruise lines is a tricky business that can have hard-to-predict consequences.

Take, for example, two cruise lines that Royal Caribbean Cruises Ltd. (RCCL) got involved with in Europe.

One, Spain’s Pullmantur, has been a qualified disaster. As the economy in Spain soured over the past decade, Pullmantur’s results worsened. Because RCCL had acquired Pullmantur outright in 2006, it had to accept the subsidiary’s losses as its own on profit or loss statements.

Last year, RCCL took a $414 million writedown of Pullmantur’s assets. The only positive has been Pullmatur’s growing business in Latin America. *TomStieghorst

The other cruise line Royal took an interest in is Germany’s TUI. It remains 50/50 partners in TUI with TUI AG, which means it can’t incorporate either losses or profits directly in its bottom line.

In this case, it wishes it could. Unlike Spain, the German economy has mostly been strong and TUI has been highly profitable.

“TUI Cruises has been a very solid performer,” RCCL Chairman and CEO Richard Fain said in a recent conference call with Wall Street analysts. “I dearly wish they were included in our yield stats because it would make them look very good.”

Royal Caribbean reported $18.8 million of “other income” in a third quarter in which it earned $490.2 million. Most of that came from TUI, CFO Jason Liberty said.

The exact structure of how cruise line partnerships are formed is worth keeping in mind as both Royal Caribbean and Carnival Corp. negotiate joint ventures in China to further their interests in that key country.

The devil is in the details, as they say. It should be interesting to see what the details are if and when these Chinese ventures are finalized.

Fuel efficiency and floating on air

Posted on 23 September, 2014 by Spacejunkie2

By Tom Stieghorst

It’s funny how visions of the future can be both wrong and right.

I had that thought after viewing a museum exhibit of designs by modernist Norman Bel Geddes, including one for a cruise ship.

Bel Geddes’ big idea was streamlining and in the 1930s, he turned out everything from vacuum cleaners to passenger buses with that teardrop profile meant to increase speed. His cruise liner — with room for 2,600 passengers — is a thing of beauty, although it looks as much like a submarine as a surface ship. The exhibit included side views showing how wind eddies swirled around the superstructure of the conventional ships of the time. *TomStieghorst

Today, however, it isn’t wind resistance that is the focus of cruise industry streamlining, but water resistance. And the object is no longer to be the fastest across the Atlantic, but to cut fuel costs.

That accounts for the bulbous projection at the bow of every cruise ship, an innovation that pushes water quietly aside and improves efficiency. Cruise ships in recent years have been slathered in silicon compounds or other coatings to make them shed marine slime and slip through the water more easily.

The newest streamlining idea is set to debut on the Quantum of the Seas, the first full test of an air lubrication system that uses microbubbles to provide a cushion for the ship to ride on.

Royal Caribbean Cruises Ltd. (RCCL) has tested the system in a small way on the Celebrity Reflection, but installed a full system on the Quantum as part of the ship’s technology emphasis.

The idea is to form and inject tiny air bubbles below the hull that reduce drag as the ship plows forward. Ironically for Bel Geddes, air is the instrument to provide extra cruise ship streamlining.

Other firms have tried this before, but Royal Caribbean has developed its own method of making the bubbles so that they’re small enough to be effective. It involves first heating the bubbles to shrink them, and then cooling them to prevent them from turning to steam as they hit seawater.

“We’re not only riding on air, we’re riding on air-conditioned air,” quipped RCCL Chairman Richard Fain, on a recent tour of Quantum in Germany.

The system — which only works when a ship is traveling at speed — could knock 7% to 9% off of propulsion costs, even taking into account the energy needed for heating and cooling, Fain said.