Shipbuilding & Repair: 360 Degree Horizon

While the order flow may fluctuate, cruise lines are staying in close contact not just with the yards that are building their ships, but also with the other building yards. “Everybody is keeping all doors open,” according to one yard source. “While owners may have preferential relationships, orders can never be taken for granted, and all the owners keep their relationships with different yards alive,” he said. “They maintain a 360 degree horizon, but at the same time both the yards and the owners recognize the benefits of continuity,” he added.

With the largest orderbook of cruise ships, Fincantieri’s Senior Vice President and Head of Cruise Business Development and Sales and Marketing Enrico Buschi said: “We are swimming against a strong current. The euro-dollar exchange rate remains a problem as long as the shipowners make most of their money in dollars. While we do not necessarily need orders immediately, we are working to get more orders, but under the circumstances, the industry can be characterized a bit by a wait-and-see attitude,” he added.

Nevertheless, according to Buschi, Fincantieri has various new designs on the drawing board for all the cruise brands the Italian builder is working with. “These range from prototypes to various stages of evolution of existing ships – but with modifications,” he added.

Both developments are parallel, he said, noting that economics will dictate which way the shipowners will go.  When the market is ready commercially, prototypes will be introduced, according to Buschi. Although, he added, while prototypes will require higher financial commitment, the per-berth cost must be attractive enough to warrant the investment.

Fincantieri has two classes of prototypes on the table, one is more evolutionary, capitalizing on the experience gained from sister ships already built – using proven technology although with new specifications. The other prototype is intended to be a break-through – a new concept, with different dimensions and operating systems – such as Carnival’s Pinnacle Project, for example, according to Buschi.

At Aker Finnyards, President Yrjo Julin said: “We need to be innovative, agile and listen to the market. And then we have to work harder and smarter.” The Finnish shipbuilder launched the world’s largest cruise ship, the $800 million, 158,000-ton Freedom of the Seas, earlier this year, and has two more sister ships under contract.

In Germany, Meyer Werft, which is building a series of ships for Norwegian Cruise Line, recently secured new orders for AIDA Cruises and Celebrity Cruises.

This past summer, Meyer delivered the Norwegian Jewel, which is based on the Norwegian Star and Dawn design. But the Jewel is not a sister ship, according to Managing Director Bernard Meyer, who said: “There are a lot of changes such as increased spa space, additional cabins aft, new courtyard villas and other modifications. So I will say that at the end of the day, we built a totally new ship in just 22 months.”

Chantiers de l’Atlantique is working on two new ships for MSC Cruises, the Musica and the Orchestra, slated for deliveries in 2006 and 2007, respectively.

“Meanwhile, we are in discussions with MSC for two larger ships,” said Patrick Boissier, CEO of the French shipbuilding company. “We are also discussing new large scale projects with several other shipowners.”  — Oivind Mathisen

Excerpt from the Cruise Industry News Quarterly Magazine: Fall 2005


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