PHOTO: Will Princess Cruises get a new ship if parent company Carnival Corp. places an order this summer? Pictured is the line's new Regal Princess. (Courtesy of Princess Cruises)
Carnival Corp. will likely order the construction of one or two cruise ships by August for delivery in 2017, says long-time cruise industry analyst Robin Farley of UBS. What's more, the corporation might not determine which brands will get the new tonnage until later.
"We believe Carnival could order two ships this summer for 2017 delivery, since the company currently has no ships on order past 2016," Farley wrote in today's research note to investors. "We see almost no chance of them ordering more than the two-three ships per year to which they have limited themselves, and in fact for 2017, a one-ship year could be more likely than a three-ship year. We think any 2017 delivery would have to be ordered by this August."
Farley notes that newbuild orders for beyond 2017 have already been placed by Royal Caribbean Cruises Ltd., Norwegian Cruise Line and MSC Cruises. And even if Richard Branson does start Virgin Cruises, it probably wouldn't get an order in for 2017 delivery. "Even a potential Virgin cruise start-up would be extremely unlikely to order for 2017, in our view," Farley wrote.
The most likely cruise brands to get a new ship in 2017 are Princess Cruises and Costa, Farley said, because both will have gone three years without a newbuild by then. The Carnival Cruise Lines brand is expecting delivery of a new prototype in December 2016, while Holland America Line is scheduled to get the new Pinnacle-class vessel in 2016. Luxury line Seabourn also is scheduled for a new ship in 2016.
"One of the advantages of having 10 brands in your portfolio is that CCL could order a platform that could be used for several different brands, and not have to specify the brand until closer to delivery, so we wouldn't be surprised to see an unspecified order," Farley wrote. "We believe CCL could be looking at a common platform that is used for new ship orders across four-five of CCL's 10 brands. The cost-saving result is that CCL could put in a two-ship order at a yard and be able to use the two ships for two different brands, and the flexibility for other brands would extend to follow-on options as well."
Two 3,600-berth ships could cost $1.44 billion to $1.66 billion to build, she said.
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