Donald: Less Efficient Ships To Rotate Out of Fleet

Costa Victoria

Thirteen ships are set to leave the Carnival Corporation fleet as the world’s largest cruise company accelerates the withdrawals of less efficient vessels that were already scheduled to find new homes.

“It’s not very complicated. Look, a number of ships would be rotating out over time anyway,” said CEO Arnold Donald, in an interview with Cruise Industry News.

“They are less efficient; you’re not to going to put the capital into them because you won’t get the returns. They are fine right now in terms of resonating with guests.”

In total, the 13 ships expected to leave the fleet represent a nearly nine percent reduction in capacity for Carnival Corporation.

“They are less efficient because they were built at a different time in a different way and they are more challenging in terms of generating returns. You’re not going to put a lot of capital into something like that if it makes your task that much greater when you can bring in the new capacity which is far more efficient,” Donald said.

Carnival announced on Wednesday that four Holland America Line ships would leave the company, going to undisclosed buyers. 

On Thursday morning, Celestyal Cruises announced it had purchased the Costa neoRomanitca.

In addition, the 1994-built Pacific Aria and 1991-built Pacific Dawn, both operating for P&O Australia, have been sold and will move to Cruise & Maritime Voyages in 2021. Those ships will be replaced with bigger and more modern tonnage as the Golden and Star Princess will transfer to the P&O Australia brand. The moves will result in a net increase of 2,344 berths for P&O Australia. 

The P&O Oceana and Oriana have both left the fleet.

Also, the Costa Victoria and P&O Oceana have left Carnival’s umbrella recently, with unknown futures. Both brands are slated to get new LNG-powered ships with capacity for over 5,000 guests. 

In 2018, China State Shipbuilding Corporation (CSSC) announced it had bought the Costa Atlantica and Mediterranea for its joint venture with Carnival Corp. with those ships scheduled to transfer in 2019 and 2020, respectively.

Carnival has typically exited around two ships a year, for example, selling 28 ships between 2006 and 2018.

New ships will help the company command a higher ticket price. New vessels are more efficient to operate, and are said to generate higher onboard revenue performance metrics.

“If we were sailing guests now, those ships would be cash flow positive and be making a contribution,” Donald said, speaking about the ships the company is retiring.

“But the reality is, when we look at it, and we don’t know when we’d be able to come back full slate; and these will be the last ships we will bring back anyway. Then you look at the timeframe it would take to do that, and then you look at the costs associated with maintaining those ships. Then you make the decision – take the cash, reduce the cash burn – which we need to do.”

Recent Carnival Corporation Secondhand Transactions: 

 Cruise Ship Brand New Operator Tonnage Capacity Built Price/Terms Delivery
 neoRomantica Costa Celestyal 53,048 1,578 1993 N/A TBD
 Maasdam Holland America Unknown 55,575 1,258 1993 N/A August 2020
 Veendam Holland America Unknown 57.092 1,350 1996 N/A August 2020
 Amsterdam Holland America Fred. Olsen 62,725 1,380 2000 N/A Fall 2020
 Rotterdam Holland America Fred. Olsen 61,849 1,404 1997 N/A Fall 2020
 Oceana P&O UK Unknown 77,499 2,016 2000 N/A July 2020
 Victoria Costa Unknown 75,166 1,928 1996 N/A June 2020
 Pacific Dawn P&O Australia CMV 70,285 2,020 1991 N/A March 2021
 Pacific Aria P&O Australia CMV 55,819 1,258 1994 N/A May 2021
 Atlantica Costa CSSC 85,619 2,114 2000 N/A Q4 2019
 Mediterranea Costa CSSC 85,619 2,114 2003 N/A Q4 2020
 Pacific Jewel P&O Australia Zen Cruises 70,250 1,590 1990 N/A March 2019
 Prinsendam Holland America Phoenix Reisen 38,484 835 1988 N/A Summer 2019
 Oriana P&O UK CTS 69,153 1,822 1995 N/A Summer 2019


Stay tuned to the Cruise Industry News website for more in a multi-part interview with Arnold Donald. 


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