The Star Cruises Group has reported net income of $17.9 million, or $0.34 per share, on revenues of $1.9 billion for the year ended Dec. 31, 2005, compared to a net loss of $11.6 million, or $0.22 per share, on revenues of $ 1.7 billion for 2004.

The increase in revenues was attributed to an 8.1 percent increase in capacity and a 5.2 percent increase in net revenue yield, according to Star. The capacity increase was due to the introduction of the Pride of America and the Norwegian Star, while the revenue increase was attributed to higher ticket prices and increased onboard spending.

Costs were also up, driven partially by the higher payroll and related expenses for NCL America ; start-up costs associated with the new ships as well the Superstar Libra in Asia; and a 41 percent increase in fuel costs year-over-year.

Q4

The Star group ended the fourth quarter of 2005 with a net loss of $25.7 million, or $0.49 per share, on revenues of $511.7 million, compared to a net loss of $39.8,million, or $0.75 per share, on revenues of $416.2 million for the same quarter in 2004.

Star attributed the higher revenues to increased capacity and to a lesser extent, a 1 percent higher net revenue yield in the fourth quarter.

Colm Veitch, Norwegian Cruises Line (NCL) president and CEO, commented that NCL was significantly impacted by Hurricane Katrina, having to move the Norwegian Sun to Houston, where the Norwegian Dream was also impacted by the discounting necessary to fill the additional ship. He said that many passengers that were booked from New Orleans cancelled.

Outlook

Veitch said that with a 17 percent capacity increase for NCL in 2006, the Wave Season – “as for the other cruise lines” – is not as strong as he would like it to be. He said the booked load factor is behind last year’s, while per diems are ahead. Veitch expects flat yields in Q1, compared to last year, and a 5 percent yield improvement for the full year. Veitch also said the yield improvement will come mostly from the company’s Hawaiian operations and not from the international fleet.

Looking at individual markets, Veitch said he expects some pricing pressure in New York with more ships being based there; that bookings for the Caribbean are not continuing at the strong pace of last year; and that while Hawaii looks reasonably strong, the company has a lot of capacity to absorb.

For 2005, capacity was up 12.6 percent for NCL, compared to 2004, with the Norwegian Spirit. Pride of America and Norwegian Jewel, partially offset by the transfer of the Norwegian Sea to Star Cruises.

Net revenue yield was up 6.6 percent, due to higher ticket prices, higher onboard revenues and NCL’s acquisition of Polynesian Adventure Tours in 2004.

On the operating side, Veitch said NCL has been able to reduce costs significantly, and that ship operating costs, excluding fuel, would have been up 4 percent per capacity day in 2005. With fuel, costs were up 18 percent. In Hawaii, he said that operations continue to expand and stabilize.