New HAL Ships

Carnival Corporation has ordered two 65,000-ton, 1,440-passenger ships for its Holland America Line subsidiary, scheduled for delivery in February and September of 1999.

To be built at Fincantieri’s Marghera shipyard, the two new ships will bring HAL’s fleet to 10, with an average age of 6.8 years.

And, according to HAL President and CEO Kirk Lanterman, HAL – a company “always working on the process of renewing our fleet and expanding capacity” – will soon begin planning yet another future generation of ships.

The new ships will be based on the design of the earlier Statendam-class – but will have the same 722-foot length and 103.5-foot beam as the Rotterdam VI.

Growth Strategy

According to Lanterman, by ordering two 65,000- ton vessels, HAL “was taking sort of a middle course” between the Rotterdam’s size and a much larger design which continues to be considered by the line. The idea of HAL ordering a 70,000- to 80,000-ton ship “is something we think of regularly,” Lanterman explained, “but the more we looked at a very large ship, the less likely we felt we could maintain the premium services and the intimacy we’re known for. We decided on this size of ship so it would still be manageable in terms of providing our services.”

With regards to the timing of HAL’s current and future newbuilding programs, Lanterman commented, “We’ve been planning this generation for a year or two, and we’ll begin planning the next generation shortly.”

Lanterman does not rule out the possibility that HAL’s future order would be for a much larger ship, noting, “I don’t think we can ever rule out that possibility, considering the economic advantages of that size of ship.”

Ship Deployment

HAL’s new orders will precipitate an increased presence for the line in certain cruising grounds, Europe among them. “One of the major thought processes behind the order was that we felt we had to expand our itineraries to satisfy our alumni,” said Lanterman. “Past passengers are not going to want to do the same thing 100 times. They need new products and new itineraries in other parts of the world.”

Lanterman confirms that one of the two new ships will be positioned in Europe for seven to eight months per year. “The demand for Europe has far outstripped the amount of capacity we have there, and it appears it will continue to be that way,” he said. “The number of people who want to see Europe numbers in the millions and millions, and a cruise is an easy way to do that. It’s a huge market.”

And what of chances that HAL will have a regular presence in the Far East, given its increased fleet size? “I think that’s inevitable,” said Lanterman, suggesting that a ship might someday be positioned there for seven to eight months a year.

In addition, Lanterman sees HAL moving to tap the South American market. “We see a lot of strength in South America that hasn’t been there until recently,” he noted.

$2.25 Billion in New Ships

The new $600 million order by the Carnival Corporation brings the group’s total orders to $2.25 billion.

And, a concern about possible over-capacity was dimissed by Lanterman this way: “Every time a new ship is ordered, there’s people wringing their hands, talking about overcapacity, but we just haven’t experienced it. Our ship orders are based on how our business is doing, and we’ve had record years since 1983. We’ve had no huge difficulties, and we’ve been able to get our ships pretty well filled.”

Lanterman sees the larger cruise companies doing well, at the expense of the smaller. “The major lines are all doing well – RCCL, Princess, HAL, Carnival. That’s four out of 35. Look at the increases shown in the Carnival annual report. I’m assuming those increases came out of somebody’s hide. Somebody someplace must be having more difficulties.”

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