NCL returns to profit despite poor economy

Norwegian Cruise Line has announced a return to profit despite the poor economy.

NCL turned a $145 million loss in the first quarter of 2008 into a $5.2 million profit for the first quarter, ended March 31, 2009.

Revenue for the period was down, an inevitable result of the price-cutting strategy all the cruiselines have followed since the credit crunch started and the fact that two ships left the fleet, thereby reducing capacity.

However, the price-cutting strategy worked and occupancy for the first quarter was up slightly from 106.4% to 106.9% – 100% occupancy means all lower berths on a ship are full, but it rises above that when upper berths are occupied – and once on board, passengers spent more.

New president and chief operating officer Roberto Martinoli said: “We would have done better if it were not for the poor economy. We have also managed to save money through efficiencies, not by cutting corners. Over the same period, our passenger satisfaction scores have gone up.”

Martinoli, who joined NCL on April 13 from private equity company Apollo Management, which owns a 50% share in NCL (Star Cruises owns the other 50%), said getting the NCL America Hawaii operation in order has also been an important factor in helping the cruiseline return to profit.

NCL America was launched in 2004 as a US-flagged brand to sail around the Hawaiian islands. The original one-ship operation quickly increased to three and there were major staffing problems, which led to passenger dissatisfaction. Now two ships have been pulled from the region and the operation has started to make a profit.

Martinoli said: “There was not enough demand for three ships in Hawaii, but if the market demands it and we have the tonnage, we would consider putting a second ship there.”

Meanwhile, Norwegian Epic went on sale last week and the company said all types of stateroom had been in high demand with a quarter of all bookings for its maiden voyage in the Caribbean on July 17.

More information:

* Sale better than expected for Norwegian Epic (May 21, 2009)

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