The Merger Factor

With business conditions improving, several cruise lines are reportedly poised to place orders for new ships, exercise existing options, or develop new products. But many such plans are reportedly on hold until the outcome is determined of the merger battle between Royal Caribbean Cruises and Carnival Corporation for P&O Princess Cruises.

The outcome so significantly impacts the industry’s competitive landscape that long-term planners are reportedly reluctant to OK major investments without knowing the end result. Even within the Big Three themselves, the merger factor has put some plans on hold – Costa Crociere’s decision to delay its joint-venture plans with Attica Shipping being one example.

Throughout the industry, many privately echoed the sentiments of Lloyd Werft Managing Director Werner Luken, who commented, “Nobody is even willing to listen to proposals (until the outcome has been decided). But I am optimistic. I hear people saying, ‘We have to orders ships, we have to expand the fleet.’ It’s just a case of one following the other; when the first goes others will follow.”  

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