Cruise tour companies do not hold back ship building Mar 26, 2009

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The posted order list for new cruise liners covers a time period through 2012, however there practically weren’t any new orders since last summer. Corrado Antonini, the president of Italian shipyard Fincantieri, one of the biggest in Europe, confesses that new project financing is very stringent in the current economic situation. He notes that 80% of building a new ship is done by subcontractors and they will take their business elsewhere if the cruise ship sector does not provide them with sufficient incentives. Thus, shipyards and cruise companies should be aware of the risk of losing experts in the case of sharp decline in new orders.

It is worth mentioning that none of the cruise companies has cancelled any orders and all the liners are expected to sail away from the ship yards as scheduled. In addition to this cruise companies slightly reduced their building plans. Silversea Cruises expects delivery of Silver Spirit later this year and initially posted an order for another liner and an option for the next. But there haven’t been any negotiations between the parties since then. Amerigo Perasso, the president of Silversea, says it is necessary to review the terms of the agreement. Shipyards are very competitive these days and as far as new orders are concerned everyone will try to beat the price.

Pamela Conover, president of The Yachts of Seabourn, while talking about the three new liners for her company, confesses that being a part of Carnival Corp. in the current situation is a great success. The corporation invested €900 million and Seabourn Odyssey is scheduled to leave the ship yard this summer; two more liners are awaited in 2011. Greg Michael, the president of Crystal Cruises, supports the opinion of Mr. Perasso saying with confidence that prices will fall and ship yards are so interested in attracting customers these days that placing new orders can become extremely profitable. The advantage of the tourists is obvious as well – a significant reduction in the costs for building new ships could greatly influence the price of the tours in the future.