MSC Sets Course

“We intend to develop our cruise business further,” said Gianluigi Aponte, president of the privately-held Mediterranean Shipping Company, parent company to Mediterranean Shipping Cruises (MSC). “But how fast we grow remains to be decided. However, we will grow steadily, if not fast.”

Cruise Industry News spoke with Aponte following MSC’s order for a new 60,000-ton, 1,600- passenger ship at Chantiers de l’Atlantique, for delivery in spring of 2003. MSC has an option for a second ship for delivery in 2004. The contract value for the first ship is $250 million. MSC presently operates four ships, which were all acquired second-hand.

“All our competitors are building new vessels. We had to decide whether to wind down the business or to expand. We are doing well, so we decided to grow.”

According to Aponte, the decision to build new ships rather than continuing the company’s previous policy of acquiring second-hand tonnage came about for two reasons: one was that as the competitors were building new ships, he realized that in order to compete MSC would need new ships as well. Aponte said he was further convinced by Carnival Corporation, which he said was asking double and triple what its older ships were worth. “They made second-hand acquisitions uneconomical,” Aponte said.

“So now our future is in newbuildings.” Future MSC ships may also get larger, depending on what the competition does, according to Aponte.

“Since we do not have any experience building passenger ships, we chose the French yard because we wanted to go with an experienced yard at least for our first vessel.”

The new MSC vessel, which has not been named yet, will have 800 cabins, according to Aponte, of which 130 will have private balconies. There will be two restaurants and two pools.

The ship will be approximately 825 feet long with a beam of about 99 feet. It will have a pod propulsion system.

At this stage, MSC has not yet appointed an interior designer, but Aponte said he expected to name an Italian designer for the new ship.

MSC is a very self-contained organization and all ship services are run in-house, except the casino and the photography concession.

“It is our ‘spirit of competition’ to run the ships 100 percent by ourselves,” Aponte said.

“How fast we grow depends on how well the new ships do,” he continued. “The passenger business is not strategic to us – it is not our core business. We are not in a hurry, so we can grow at a speed that we are comfortable with.

“Until now the cruise side has been relatively unimportant to our overall business. We have more than 150 (merchant) ships and are the fourth largest shipping company in the world. Cruise represents two to three percent of our revenues. It hasn’t had much impact on our balance sheet,” Aponte said.

“For us, ordering new ships is not such a major effort. We have the financial resources to go ahead.

“What is most important now is the fact that we have decided to grow our cruise business. And at the present rate level the ships will pay for themselves.” He added that he wanted to grow MSC to an economically efficient scale and do so with more efficient ships.

“We are doing well,” Aponte said with reference to the cruise business. But in the past we have been quiet, while we decided which direction to take,” he added.

“Our older vessels have served us well; they have successful trades and a loyal clientele. However, when the first new ship comes on line, we will phase out one of our older ships. When the second new ship comes, we may phase out another.

“Another reason for not expanding too fast is that we believe an experienced crew is essential. We do not want to dilute our crew resources with too many ships coming too fast. The key to our success is our quality product delivery,” Aponte added.

While MSC was launched in 1995, the company had previously operated since 1989 as StarLauro Cruise Line. Of MSC’s four ships, three are marketed by the company, the Melody, Monterey and Rhapsody, while the fourth vessel, the Symphony, is chartered out.

All three ships sail in the Mediterranean during the summer months. But during the winter, the Melody sails in the Caribbean; the Monterey is deployed in South Africa; and the Rhapsody is in South America. Cruises are marketed in Europe as well as in the United States, South Africa and South America.

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