Carnival Corp. will add nine ships to its fleet over a four-year period starting in 2019, steps that will boost fuel efficiency and add the industry’s newest amenities.
The vessels will sail in Europe and North America, as well as in emerging markets such as China, the Miami-based company, the world’s largest cruise-line operator, said in a statement Thursday. Financial details weren’t disclosed.
Operators including Carnival, Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. have been investing in new ships to lower fuel costs, carry more passengers and add onboard conveniences, as they have with faster WiFi service and upgraded theaters. While passenger volume has grown more rapidly than capacity in recent years, some markets, such as the Caribbean, have seen price wars because of competition.
“We’re excited to take this next step in our fleet enhancement plan with these two new agreements that are consistent with our long-term strategy of measured capacity growth over time,” Carnival Chief Executive Officer Arnold Donald said in the statement.
The company has 101 ships in its fleet. The number will shrink this year, as two are added and four removed. A total of 10 ships are already on order to enter service through 2018. Donald has been trying to boost margins by using the company’s size to obtain discounts on all kinds of purchases.
Over the past decade, Carnival’s capital spending has ranged from $2 billion to $3.6 billion annually.
Industry capacity growth in 2014 slowed to 2.6 percent, the lowest in at least 12 years, according to a March 20 report from Timothy Conder, an analyst at Wells Fargo Securities. Growth should reach 3 percent to 5 percent in 2017 and 2018, with Carnival at the low end, he said.
Fincantieri SpA will build five of Carnival’s vessels at its shipyards in Monfaclone and Marghera, Italy, while Meyer Werft GmbH will construct the remaining four in Papenburg, Germany, and Turku, Finland.
Ships entering service this year include the 3,657- passenger Britannia, the largest vessel designed exclusively for the U.K. It entered service March 10.
This article was written by Christopher Palmeri from Bloomberg and was legally licensed through the NewsCred publisher network.