Carnival plots slower capacity growth from 2013

Carnival Corporation, the world’s largest cruise operator, has said its new ship building programme will be “more slow and rational” from 2013 onwards.

Chairman and chief executive Micky Arison said Carnival was “still right in the middle” of a fairly prolific expansion of its fleet, with six new ships joining this year, but that this would be cut to two or three a year from 2013 onwards.

He said the rationale behind the decision to slow down capacity growth was two-fold. 

Firstly, investing in fewer new ships would drive more cash into the business and secondly it also reflected the fact that there has been some softening in the market because of the economic climate.

“People think, if you don’t build as many ships, that you’re either trying to drive more cash flow or that demand is diminishing. The truth is that it’s a combination of both,” he said.

Arison was in London last week for three days of shareholder meetings in between the launch of the new Costa Deliziosa in Venice and the arrival of the Aida Blue in Hamburg. P&O’s new superliner Azura is due for delivery in April.

He said the mood among investors was good and he was able to answer questions on key areas including newbuild strategies, cost control and fuel consumption among others.

“A year ago the mood wouldn’t have been the same. But our stock has come up – we have recovered nicely,” Arison said.

He said he expected to confirm an order for two new Princess Cruises ships within weeks, adding that the opportunities for growth in the cruise market were still huge, particularly in the UK where penetration was still only two-thirds of what it is in North America.

“There’s a rate of growth in the UK that remains very exciting,” he said.

Arison claimed Carnival Corporation had managed to reduce its fuel consumption by 5% in 2009, smashing its own annual target of between 2-3%. 

He said 2-3% was the target again for 2010 which he also hoped the operator would be able to exceed.

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