One of the two companies that own NCL Corporation (NCLC), which again comprises Norwegian Cruise Line and NCL America, warns that they are not sure that NCLC will be able to meet its obligations after a yeasr from here. That is a bit scary, but before proceeding, here is the actual text issued by Genting Hong Kong:
"We believe our cash on hand, expected future operating cash inflows, additional borrowings under existing credit facilities and our ability to issue debt securities or raise additional equity, including capital contributions, will be sufficient to fund operations, debt payment requirements, capital expenditures and maintain compliance with covenants under our debt agreements over the next twelve-month period. There is no assurance that cash flows from operations and additional financings will be available in the future to fund our future obligations."
Well, you could say that who can tell the future - apart from the so called climate experts, who do not seem to show any degree of humility when it comes to the reliability of their 100 year weather forecasts.
Anyway, the future of NCLC could turn out choppy after the next 12 months, for which the company has the financing in place to take delivery of Norwegian Epic and to meet its other financial commitments as well.
The development of the US economy, for which NCLC depends on more than the other three cruise majors, is obviously a crucial factor to get falling yields back to a rising track. Indeed, there is indication that the worst is over for the global economy, which bodes well for NCLC's efforts.
The NCLC fleet now comprises only modern tonnage, which has hardly ever been the case before, and the beefed up Freestyle Cruising concept has strengthened the image of the NCL brand by differentiating it clearly from competing offerings. That is good news too.
But if - and indeed this is just an if at this point - NCLC failed to honour its obligations some time after the end of 2010, what then? If comparisons drawn from container and dry bulk sectors of cargo shipping are anything like justified as they most likely would be, it seems highly unlikely that NCLC would go bankrupt even in a worst case scenario. Why not? Well, for the same simple reason that has kept many a troubled container line and dry bulk shipping company afloat despite the fact that they have breached loan covenants and missed repayments of debt.
Banks do not want to became shipping companies, nor would they want to turn to a cruise line. Consequently, should NCLC run into trouble in the future, the likeliest way out would be a rescue package, e.g. in the form of a debt to equity swap. This would give NCLC's financiers a significant, perhaps even controlling interest in the company. However, it could continue trading as normal and at some point, after some restructuring, the banks could quite simply sell their shares.
Unlike container and dry bulk shipping, the cruise industry is highly consolidated and there is no structural overcapacity, which is a major worry - probably for several years to come - in both of the two sectors of cargo shipping.
With a modern, harmonious fleet NCLC should be able to capitalise well on a recovery of the cruise industry. It would be a great shame to see the worst case scenario to materialise. Anyway, one more question remains: how come the NCL group has never produced strong ,consistent profits like its competitors? It has suffered from some kind of an issue for too long.
Introduction of the SS Norway in 1980 has been hailed as triumph, but I would say it was a mistake of strategic importance. Unlike Royal Caribbean and Carnival Cruise Lines, NCL was not able to build a consistent fleet until it axed the last obsolete ships last year. You have to learn to walk before you can run, a fact that both Royal Caribbean and Carnival understood, but which NCL failed to grasp. This had a crippling effect on its prospects for two decades.
Then, in the middle of the current decade, came the NCL America adventure that was the biggest strategic failure of any major cruise company in the past 10 years, if indeed not more. Lots of capital and other resources were pumped into a project that failed on almost every account, leading to dramatic downsizing of the NCL America brand to just one from three ships. This again took up further resources at the Miami headquarters.
All these are matters of the past now. Today, NCLC has a good fleet, a strong brand and these should provide it with a platform on which to prosper.
Monday, 16 November 2009
Friday, 13 November 2009
Something is fundamentally wrong with Finnish shipbuilding
Something is badly wrong with Finnish shipbuilding: it appears to plunge from one crisis to another, both in good times as well as bad ones.
Throughout the years, the yards there have been able to build spectacular vessels, the latest example of which is Oasis of the Seas. However, what the various owners of the three yards that are all owned by STX Europe today have not been able to do is to run them smoothly.
Two decades ago, in the autumn of 1989, a company called Wartsila Marine Industries (WMI) went bankrupt. It owned the yards in Helsinki and Turku. It had a huge orderbook, including two 58,000 gross ton cruise ferries for partners of Silja Line and three 70,000 gross ton Fantasy class cruise ships for Carnival Cruise Lines.
The Soviet trade that had kept the yards busy was on the wane and just two years after this, the Soviet Union itself would collapse. Against this background , the management of WMI had taken orders, such as the Carnival one, knowing fully well that they can only make money if they can significantly increase productivity.
Nothing of that sort would happen, indeed militant unions preferred to carry out their old practises by extending workers' weekend by endless short strikes. This combined with an unworkable target to raise productivity was largely to blame for the collapse of WMI.
Early in 1990, a new company was erected on the ruins of WMI, mainly by Martin Saarikangas, who became its ceo and Ted Arison, founder of Carnival. It was based on a conversion of debt to equity: the customers of WMI that had claims against the company simply swapped the claims for shares in the new company. The move was a brilliant one, if not unique in similar situations in other industries.
In the early 1990s, the shipping company shareholders of Masa Yards, as the new company was called, sold their shares to Kvaerner, the Norwegian engineering group that was rapidly expanding its portfolio of shipyards. Throughout the decade, Kvaerner Masa-Yards (KMY) was a highly successful builder of cruise liners.
However, a new crisis emerged in the turn of the millennium, when KMY was building a quintet of 137,000 gross ton Voyager class cruise liners for Royal Caribbean International (RCI). In line with industry practise, RCI would pay 80% of the contract price on delivery of each vessel. However, KMY would have to pay its staff, contractors and suppliers at a quicker pace, which meant that the company and the entire Kvaerner group then faced a huge need for working capital. The situation became so bad that KMY actually sold some of the building contracts to banks to get some cash.
As the new millennium progressed and the working capital crisis disappeared from the agenda, a new crisis started to build up at what was now called Aker Yards Finland (AYF). Kvaerner had exited shipbuilding after the working capital fiasco and a disastrous acquisition of Trafalgar House, then e.g. parent of Cunard Line.
The Aker group, which already owned the yard in Rauma, acquired KMY and for some time, everything seemed to go quite well. Then, roughly in the middle of the decade, AYF started to take on huge numbers of orders for ferries, mainly from Tallink but also from Brittany Ferries and Color Line. At the same time, it was building the final Voyager class and later the extended version of that design that was to be known as the Freedom class ships for RCI.
Early in 2007, Aker chairman Kjell Inge Rokke, a former fisherman turned billionaire, offloaded the Aker group's 40% stake in Aker Yards (AKY), which was the Oslo-listed parent of AYF. Soon STX stepped in, first by acquiring Aker's 40% and in the following year, making a full bid for AKY, whose portfolio of cruise ship yards also included the former Chantiers de l'Atlantique yard in France.
The years 2007 and 2008 were not good for Aker Yards: their orderbook was too big and both the yard itself and its suppliers and contractors struggled to keep up with delivery dates and in the case of many ferries, failed to meet them. The group booked heavy one-off charges against these problems.
Rumours started to circulate that Yrjo Julin, the Finnish head of AYF, had been encouraged by Rokke to fill the orderbooks and thereby boost the share price of AKY so that he could get the highest possible price for his shares.
Last year, the situation started to change quickly: ship after another was delivered without new orders being won apart that for two 49,000 gross ton ferries for P&O Ferries. Today, the Turku yard only has Allure of the Seas and the Rauma one the two P&O Ferries' newbuildings on its orderbook.
To sum up: why does the Finnish shipbuilder, whatever its name, go through these seemingly endless difficulties in both good times as bad?
Surely e.g. Meyer Werft in Germany needs to look at working capital and try to maintain a stable workoload throughout an economic cycle as well. Yet we have not heard of any of such problems from the quarters of that company.
Could it be that Finland is a nation of engineering to such a degree that apart from getting the physical product right, other aspects of the business matter little?
As a native of that country that has lived out of there for the past 12 years, it sounds like a credible explanation to a certain degree.
Throughout the years, the yards there have been able to build spectacular vessels, the latest example of which is Oasis of the Seas. However, what the various owners of the three yards that are all owned by STX Europe today have not been able to do is to run them smoothly.
Two decades ago, in the autumn of 1989, a company called Wartsila Marine Industries (WMI) went bankrupt. It owned the yards in Helsinki and Turku. It had a huge orderbook, including two 58,000 gross ton cruise ferries for partners of Silja Line and three 70,000 gross ton Fantasy class cruise ships for Carnival Cruise Lines.
The Soviet trade that had kept the yards busy was on the wane and just two years after this, the Soviet Union itself would collapse. Against this background , the management of WMI had taken orders, such as the Carnival one, knowing fully well that they can only make money if they can significantly increase productivity.
Nothing of that sort would happen, indeed militant unions preferred to carry out their old practises by extending workers' weekend by endless short strikes. This combined with an unworkable target to raise productivity was largely to blame for the collapse of WMI.
Early in 1990, a new company was erected on the ruins of WMI, mainly by Martin Saarikangas, who became its ceo and Ted Arison, founder of Carnival. It was based on a conversion of debt to equity: the customers of WMI that had claims against the company simply swapped the claims for shares in the new company. The move was a brilliant one, if not unique in similar situations in other industries.
In the early 1990s, the shipping company shareholders of Masa Yards, as the new company was called, sold their shares to Kvaerner, the Norwegian engineering group that was rapidly expanding its portfolio of shipyards. Throughout the decade, Kvaerner Masa-Yards (KMY) was a highly successful builder of cruise liners.
However, a new crisis emerged in the turn of the millennium, when KMY was building a quintet of 137,000 gross ton Voyager class cruise liners for Royal Caribbean International (RCI). In line with industry practise, RCI would pay 80% of the contract price on delivery of each vessel. However, KMY would have to pay its staff, contractors and suppliers at a quicker pace, which meant that the company and the entire Kvaerner group then faced a huge need for working capital. The situation became so bad that KMY actually sold some of the building contracts to banks to get some cash.
As the new millennium progressed and the working capital crisis disappeared from the agenda, a new crisis started to build up at what was now called Aker Yards Finland (AYF). Kvaerner had exited shipbuilding after the working capital fiasco and a disastrous acquisition of Trafalgar House, then e.g. parent of Cunard Line.
The Aker group, which already owned the yard in Rauma, acquired KMY and for some time, everything seemed to go quite well. Then, roughly in the middle of the decade, AYF started to take on huge numbers of orders for ferries, mainly from Tallink but also from Brittany Ferries and Color Line. At the same time, it was building the final Voyager class and later the extended version of that design that was to be known as the Freedom class ships for RCI.
Early in 2007, Aker chairman Kjell Inge Rokke, a former fisherman turned billionaire, offloaded the Aker group's 40% stake in Aker Yards (AKY), which was the Oslo-listed parent of AYF. Soon STX stepped in, first by acquiring Aker's 40% and in the following year, making a full bid for AKY, whose portfolio of cruise ship yards also included the former Chantiers de l'Atlantique yard in France.
The years 2007 and 2008 were not good for Aker Yards: their orderbook was too big and both the yard itself and its suppliers and contractors struggled to keep up with delivery dates and in the case of many ferries, failed to meet them. The group booked heavy one-off charges against these problems.
Rumours started to circulate that Yrjo Julin, the Finnish head of AYF, had been encouraged by Rokke to fill the orderbooks and thereby boost the share price of AKY so that he could get the highest possible price for his shares.
Last year, the situation started to change quickly: ship after another was delivered without new orders being won apart that for two 49,000 gross ton ferries for P&O Ferries. Today, the Turku yard only has Allure of the Seas and the Rauma one the two P&O Ferries' newbuildings on its orderbook.
To sum up: why does the Finnish shipbuilder, whatever its name, go through these seemingly endless difficulties in both good times as bad?
Surely e.g. Meyer Werft in Germany needs to look at working capital and try to maintain a stable workoload throughout an economic cycle as well. Yet we have not heard of any of such problems from the quarters of that company.
Could it be that Finland is a nation of engineering to such a degree that apart from getting the physical product right, other aspects of the business matter little?
As a native of that country that has lived out of there for the past 12 years, it sounds like a credible explanation to a certain degree.
Wednesday, 4 November 2009
Life after Oasis
The cruise industry has made a lot of noise about the introduction of Royal Caribbean International's (RCI) Oasis of the Seas, which at 225,000 gross tons is by far the largest cruise liner ever built. Obviously, the industry has every reason to tout the new ship - a sister will enter service late next year - not only because of its size, but also due to the many new features it introduces.
Still, it is also obvious to ask what next? In addition to Allure of the Seas, the second Oasis class newbuilding, the Royal Caribbean Cruises Ltd (RCCL) group has three 122,000 gross ton newbuildings due for its Celebrity Cruises brand. Meanwhile, the Madrid-based Pullmantur subsidiary of the group seems to live a life of its own: ships are moved from one market to another and the future of the Croisieres de France brand remains in doubt, at least as far as rumours are concerned.
But let us go back to RCCL proper: an industry source says that talks are in progress over a possible third Oasis class ship as well as a fourth 158,400 gross ton Freedom class unit for RCI. An option for the fourth ship has been held at STX Europe in Finland for a long time.
What will hapeen in case of these two depends on two things, the source says. First one is price and the second one is what kind of risks RCCL shareholders are willing to take. The global economy appears to be regaining some health again, which is obviously good news. This combined with the hope that Oasis of the Seas will prove to be the success it is expected to be would obviously reduce the level of risk involved with a third order.
A fourth Freedom class vessel might incorportate some features from the Oasis class to breath newlife into the design that dates back to the middle of the decade, wehen it was first unveiled as "Ultra Voyager," with a reference to the previous series of newbuildings of RCI.
Independence of the Seas, which was introduced in 2008, has operated an extended summer season from Southampton in the UK since delivery and starting in 2010/11, will remain in britain year-round. This indicates that a ship of this size can be employed with a greater choice of base ports than an Oasis class vessel. Assuming that the industry regains a path of solid growth in the future, an Oasis class vessel in Southampton could become possible.
The banking industry died first and committed suicide next as it gambled with sub-prime mortgages and financed other asset deals at hugely inflated prices, which then led to the infamous crash in 2007-08. Against this background, it may well be that RCCL will have to turn to the bond market rather than to its banks when it comes to raising - at least part - of the finance it needs to take delivery of Allure of the Seas.
In addition, Finnvera, the Finnish export credit institution that provided already part of the funding for Oasis, may well have to dig into its pockets for a second time. RCCL has financing in place for all the Celebrity Cruises' remaining newbuildings.
RCCL builds truly fine ships for both Celebrity and RCI. However, one question needs to be asked: are these in themselves excellent vessels cannibalising sales of cruises on other classes of ships of these two brands?
Still, it is also obvious to ask what next? In addition to Allure of the Seas, the second Oasis class newbuilding, the Royal Caribbean Cruises Ltd (RCCL) group has three 122,000 gross ton newbuildings due for its Celebrity Cruises brand. Meanwhile, the Madrid-based Pullmantur subsidiary of the group seems to live a life of its own: ships are moved from one market to another and the future of the Croisieres de France brand remains in doubt, at least as far as rumours are concerned.
But let us go back to RCCL proper: an industry source says that talks are in progress over a possible third Oasis class ship as well as a fourth 158,400 gross ton Freedom class unit for RCI. An option for the fourth ship has been held at STX Europe in Finland for a long time.
What will hapeen in case of these two depends on two things, the source says. First one is price and the second one is what kind of risks RCCL shareholders are willing to take. The global economy appears to be regaining some health again, which is obviously good news. This combined with the hope that Oasis of the Seas will prove to be the success it is expected to be would obviously reduce the level of risk involved with a third order.
A fourth Freedom class vessel might incorportate some features from the Oasis class to breath newlife into the design that dates back to the middle of the decade, wehen it was first unveiled as "Ultra Voyager," with a reference to the previous series of newbuildings of RCI.
Independence of the Seas, which was introduced in 2008, has operated an extended summer season from Southampton in the UK since delivery and starting in 2010/11, will remain in britain year-round. This indicates that a ship of this size can be employed with a greater choice of base ports than an Oasis class vessel. Assuming that the industry regains a path of solid growth in the future, an Oasis class vessel in Southampton could become possible.
The banking industry died first and committed suicide next as it gambled with sub-prime mortgages and financed other asset deals at hugely inflated prices, which then led to the infamous crash in 2007-08. Against this background, it may well be that RCCL will have to turn to the bond market rather than to its banks when it comes to raising - at least part - of the finance it needs to take delivery of Allure of the Seas.
In addition, Finnvera, the Finnish export credit institution that provided already part of the funding for Oasis, may well have to dig into its pockets for a second time. RCCL has financing in place for all the Celebrity Cruises' remaining newbuildings.
RCCL builds truly fine ships for both Celebrity and RCI. However, one question needs to be asked: are these in themselves excellent vessels cannibalising sales of cruises on other classes of ships of these two brands?
Tuesday, 13 October 2009
Time to think counter-cyclical ordering
In the years before the financial crisis and the recession that followed it, leading cruise shipping groups contracted new tonnage at a rate that had never been seen before - and it may indeed take a while before anything like that will happen in the future.
Right now, the orderbooks of shipbuilders like STX Europe and Fincantieri are thinning at a worrying rate, while Meyer Werft in Germany can enjoy a slightly longer spell of good workload thanks to contracts from Aida, Disney and Celebrity.
The current challenging economic climate will not last forever and there are strong signs coming from various parts of the world that indeed the worst should be over and leading economies should either have entered or enter to growth.
However, the cruise yards and a complex infrastructure of suppliers and contractors that complement the yards are facing tough times. While major business failures have been avoided so far, the conditions are becoming tougher almost by the day in the current drought of orders. There is little help to be expected from the cargo shipping sector - an excessive spree of orders has led to severe overcapacity in many sectors and owners are trying to cancel existing orders rather than to seek to place new ones.
It is vitally important that the infrastructure of yards, suppliers and contractors overcome the current lean times. Without that it will be very hard indeed to build a major cruise liner and it must take quite a bit of time and effort to re-establish such an infrastructure in case an existing network collapsed.
Therefore, some companies might do well for themselves and the industry as a whole by considering counter-cyclical ordering. Yes, freight volumes are low for ferry companies and ticket prices plus on board spending below the levels seen before 2007 in both ferry and cruise trades.
However, the cost of labour, equipment and raw materials must be well below those seen in the peak of the recent strong cycle. Interest rates are lower too and if companies can raise the required funding, they might save quite a bit of cash by ordering now rather than once a strong cycle is gathering momentum again with all its subsequent implications. Furthermore, delivery times of ships themselves plus vital components, such as main engines, which were very long only a couple of years ago, must be much shorter today.
A problem with shipping in general is the fact that it is cyclical to the extreme. The recent long, strong cycle led to a situation in which there were more than 11,000 ships of all types put together on order. some of the yards that were supposed to build them did not exist at the time and the downturn may well mean that many of them will not come into existence either.
So much the better: the world is not suffering from a shortage of ship building capacity. Combined with easy credit in those hectic pre-2007 days, excess shipbuilding capacity was in fact a major reason why the sector as a whole ended up in the mess in which it is today.
Passenger shipping, however, is very different. In the cruise industry, Carnival Corp & PLC alone controls about half of all beds on the market. Such degree of consolidation is unknown in other areas of shipping: Maersk Line only has 15% of the global container shipping capacity, by comparison.
In ferries, a couple of strong players usually share a market between them as these companies operate on regional rather than Europpe-wide let alone global level. Many ferries are old and ripe for recycling, so hopefully some owners will think outside of the box when it comes to ordering new tonnage and take up the counter-cyclical way.
Right now, the orderbooks of shipbuilders like STX Europe and Fincantieri are thinning at a worrying rate, while Meyer Werft in Germany can enjoy a slightly longer spell of good workload thanks to contracts from Aida, Disney and Celebrity.
The current challenging economic climate will not last forever and there are strong signs coming from various parts of the world that indeed the worst should be over and leading economies should either have entered or enter to growth.
However, the cruise yards and a complex infrastructure of suppliers and contractors that complement the yards are facing tough times. While major business failures have been avoided so far, the conditions are becoming tougher almost by the day in the current drought of orders. There is little help to be expected from the cargo shipping sector - an excessive spree of orders has led to severe overcapacity in many sectors and owners are trying to cancel existing orders rather than to seek to place new ones.
It is vitally important that the infrastructure of yards, suppliers and contractors overcome the current lean times. Without that it will be very hard indeed to build a major cruise liner and it must take quite a bit of time and effort to re-establish such an infrastructure in case an existing network collapsed.
Therefore, some companies might do well for themselves and the industry as a whole by considering counter-cyclical ordering. Yes, freight volumes are low for ferry companies and ticket prices plus on board spending below the levels seen before 2007 in both ferry and cruise trades.
However, the cost of labour, equipment and raw materials must be well below those seen in the peak of the recent strong cycle. Interest rates are lower too and if companies can raise the required funding, they might save quite a bit of cash by ordering now rather than once a strong cycle is gathering momentum again with all its subsequent implications. Furthermore, delivery times of ships themselves plus vital components, such as main engines, which were very long only a couple of years ago, must be much shorter today.
A problem with shipping in general is the fact that it is cyclical to the extreme. The recent long, strong cycle led to a situation in which there were more than 11,000 ships of all types put together on order. some of the yards that were supposed to build them did not exist at the time and the downturn may well mean that many of them will not come into existence either.
So much the better: the world is not suffering from a shortage of ship building capacity. Combined with easy credit in those hectic pre-2007 days, excess shipbuilding capacity was in fact a major reason why the sector as a whole ended up in the mess in which it is today.
Passenger shipping, however, is very different. In the cruise industry, Carnival Corp & PLC alone controls about half of all beds on the market. Such degree of consolidation is unknown in other areas of shipping: Maersk Line only has 15% of the global container shipping capacity, by comparison.
In ferries, a couple of strong players usually share a market between them as these companies operate on regional rather than Europpe-wide let alone global level. Many ferries are old and ripe for recycling, so hopefully some owners will think outside of the box when it comes to ordering new tonnage and take up the counter-cyclical way.
Tuesday, 6 October 2009
Artemis - pioneering ship to change hands
P&O Cruises have sold their oldest ship, the 1984 built Artemis. At 44,588 gross tons, it is also the smallest unit in the fleet that will grow to seven units next year with the arrival of the 115,000 gross ton Azura in April - Artemis itself will continue to sail for the current operator until April 2011. That ship triggers mixed feelings when I think about its design concept and the execution of that concept.
When I took a cruise on Artemis in 2006, the ship did not impress. While the cabin accommodation was good, the ship's public rooms were just woefully inadequate to keep me happy for the 12 or so nights that I spent on board. There is a show lounge forward and a secondary lounge aft. In between a two-deck high atrium with a bar provided the only alternative to those two large, bland and boring principal public rooms on the same deck. The bar was cosy, but the seats so uncomfortable that relaxation was all but impossible.
An observation lounge at the foot of the funnel was slightly better, but even there a handrail was placed so that when I sat at a table close to the floor to ceiling windows, I could see the handrail rather than what was outside.
Although this is a personal opinion, and admittedly a rather unkind one towards the designers of the vessel, it is difficult to appreciate that way back in 1982 when the ship was ordered, it was hailed as the most forward looking cruise liner contracted so far.
The design itself was called All Outside Cabin or AOC for short - and created by a team of naval architects at the then Wartsila shipyards in Finland, which today are part of STX Europe. In previous designs, most cabins had been placed in the hull and thelowermost decks of the s uperstructure, while principal public spaces were located above these, together with a handful of luxury cabins.
In AOC, this was reversed upside down: cabins would go up and the principal public rooms find their way down, in case of Royal Princess as Artemis was first called, to the upermost deck in the hull. Consequently a quarter of the 600 or so cabins on the ship could have private balconies, an unprecedented figure.
AOC was first conceived as a 55,000 gross ton design, whose rounded strern bore striking resemblance to Song of America that Wartsila had delivered to Royal Caribbean in late 1982. Although the original design was never built, AOC set the benchmark for most cruise liners that have been built since then. A layout whereby a theatre is located forward, principal dining venue either aft on the same decks - or closer to midships on a lower deck - and a host of other public space in between these, usually on the uppermost deck in the hull and the one just above that, is the benchmark to which most cruise liners on order still today are built.
This demonstrates that the AOC concept itself was an excellent idea - indeed, it is tempting to guess whether the cruise industry could have staged the stellar rise it has enjoyed since the introduction of Royal Princess in 1984 and subsequent ships with lots of cabins with balconies had that concept not been introduced.
The early 1980s saw a flow of concept designs to flow from the offices of Wartsila. Sail Cruiser was a boutique sail cruise ship that emerged with Windstar, although the ships were built in France. SWATH or Small Waterplane Area Twin Hull used ideas from oil rigs and combined these with ones of the cruise industry, in 1992 a catamaran vessel called Radisson Diamond was built to this design. However, slow and with a deep draft, it was not a success.
Still, a feature from SWATH is now making headlines again: a large town square that cabin balconies face will be repeated in Oasis of the Seas and Allure of the Seas, the 225,000 gross ton giants of Royal Caribbean International.
AOC was an excellent concept, although Royal Princess / Artemis was not an impressive execution of that concept. SWATH has not been repeated since the single pioneer vessel that was anything but a success, but the town square part of the design may well become the next big think in cruise liner design.
And who knows, perhaps SWATH itself will get a second chance as a result!
When I took a cruise on Artemis in 2006, the ship did not impress. While the cabin accommodation was good, the ship's public rooms were just woefully inadequate to keep me happy for the 12 or so nights that I spent on board. There is a show lounge forward and a secondary lounge aft. In between a two-deck high atrium with a bar provided the only alternative to those two large, bland and boring principal public rooms on the same deck. The bar was cosy, but the seats so uncomfortable that relaxation was all but impossible.
An observation lounge at the foot of the funnel was slightly better, but even there a handrail was placed so that when I sat at a table close to the floor to ceiling windows, I could see the handrail rather than what was outside.
Although this is a personal opinion, and admittedly a rather unkind one towards the designers of the vessel, it is difficult to appreciate that way back in 1982 when the ship was ordered, it was hailed as the most forward looking cruise liner contracted so far.
The design itself was called All Outside Cabin or AOC for short - and created by a team of naval architects at the then Wartsila shipyards in Finland, which today are part of STX Europe. In previous designs, most cabins had been placed in the hull and thelowermost decks of the s uperstructure, while principal public spaces were located above these, together with a handful of luxury cabins.
In AOC, this was reversed upside down: cabins would go up and the principal public rooms find their way down, in case of Royal Princess as Artemis was first called, to the upermost deck in the hull. Consequently a quarter of the 600 or so cabins on the ship could have private balconies, an unprecedented figure.
AOC was first conceived as a 55,000 gross ton design, whose rounded strern bore striking resemblance to Song of America that Wartsila had delivered to Royal Caribbean in late 1982. Although the original design was never built, AOC set the benchmark for most cruise liners that have been built since then. A layout whereby a theatre is located forward, principal dining venue either aft on the same decks - or closer to midships on a lower deck - and a host of other public space in between these, usually on the uppermost deck in the hull and the one just above that, is the benchmark to which most cruise liners on order still today are built.
This demonstrates that the AOC concept itself was an excellent idea - indeed, it is tempting to guess whether the cruise industry could have staged the stellar rise it has enjoyed since the introduction of Royal Princess in 1984 and subsequent ships with lots of cabins with balconies had that concept not been introduced.
The early 1980s saw a flow of concept designs to flow from the offices of Wartsila. Sail Cruiser was a boutique sail cruise ship that emerged with Windstar, although the ships were built in France. SWATH or Small Waterplane Area Twin Hull used ideas from oil rigs and combined these with ones of the cruise industry, in 1992 a catamaran vessel called Radisson Diamond was built to this design. However, slow and with a deep draft, it was not a success.
Still, a feature from SWATH is now making headlines again: a large town square that cabin balconies face will be repeated in Oasis of the Seas and Allure of the Seas, the 225,000 gross ton giants of Royal Caribbean International.
AOC was an excellent concept, although Royal Princess / Artemis was not an impressive execution of that concept. SWATH has not been repeated since the single pioneer vessel that was anything but a success, but the town square part of the design may well become the next big think in cruise liner design.
And who knows, perhaps SWATH itself will get a second chance as a result!
Monday, 14 September 2009
On dining with supposedly likely minded fellow passengers
"Dining with likely minded fellow passengers."
This line appears in so many cruise brochures that it must rank among the most repeated cliches of the industry. Well, every now and then you do meet interesting people at your dinner table and consequently, the conversation that follows can be interesting as well.
However, most of the time, the precise opposite is true. First of all, people are not chatting with each other but at each other, as somebody so well put it. How many cruises have I taken on this line before and how ship X compared with ship Y tend to rank among top opening lines in this chit chat, followed by how delightful is our six bedroom house in Kingston-upon-Thames.
Quite simply, the fact that a number of people have chosen the same ship for the same cruise does not mean that they have an awful lot in common.
I mostly cruise on my own and those holidays are time I dedicate for myself and do things that I want to do. Quite simply, I find very little appeal in the idea of spending two hours each night with the same people with whom I am not likely minded, listening to something that I have no interest in whatsoever.
Luckily, many lines and ships offer alternative dining options whereby you can escape all this. My preferred option is to have light dinner at the buffet on one night and then on some other book a table at a specialty restaurant. Yes, it will cost extra, but it is worth it!
Venues like Todd English on Cunard Line's Queen Victoria or Arcadian Rhodes on P&O Cruises' Arcadia that I have visited on my own have produced a truly enjoyable dining experience whereas the main dining room frequently has not.
In these little restaurants, you enjoy the attentive but not intrusive service of half a dozen or so people, the atmosphere is quieter, more peaceful and more pleasant than that of the huge main dining room. And last but not certainly least, you can have a table for yourself. There is no obligation to join a conversation or to be exposed to that of others, which is so very satisfying indeed. A holiday should be a holiday also from social engagements that you do not want to parttake.
All this turned even better when Carolyn, an American friend of mine, said that she takes a book with her to such restaurants when she goes on cruises on her own. The book acts as a perfect "companion" that allows you to divert your attention to something between the courses and even while enjoying one so that you can comfortably slow down and truly enjoy the meal.
I will be going on Queen Victoria again in December for a quick stint of four nights and look forward to going back to Todd English: it will be Me Time in My Space.
This line appears in so many cruise brochures that it must rank among the most repeated cliches of the industry. Well, every now and then you do meet interesting people at your dinner table and consequently, the conversation that follows can be interesting as well.
However, most of the time, the precise opposite is true. First of all, people are not chatting with each other but at each other, as somebody so well put it. How many cruises have I taken on this line before and how ship X compared with ship Y tend to rank among top opening lines in this chit chat, followed by how delightful is our six bedroom house in Kingston-upon-Thames.
Quite simply, the fact that a number of people have chosen the same ship for the same cruise does not mean that they have an awful lot in common.
I mostly cruise on my own and those holidays are time I dedicate for myself and do things that I want to do. Quite simply, I find very little appeal in the idea of spending two hours each night with the same people with whom I am not likely minded, listening to something that I have no interest in whatsoever.
Luckily, many lines and ships offer alternative dining options whereby you can escape all this. My preferred option is to have light dinner at the buffet on one night and then on some other book a table at a specialty restaurant. Yes, it will cost extra, but it is worth it!
Venues like Todd English on Cunard Line's Queen Victoria or Arcadian Rhodes on P&O Cruises' Arcadia that I have visited on my own have produced a truly enjoyable dining experience whereas the main dining room frequently has not.
In these little restaurants, you enjoy the attentive but not intrusive service of half a dozen or so people, the atmosphere is quieter, more peaceful and more pleasant than that of the huge main dining room. And last but not certainly least, you can have a table for yourself. There is no obligation to join a conversation or to be exposed to that of others, which is so very satisfying indeed. A holiday should be a holiday also from social engagements that you do not want to parttake.
All this turned even better when Carolyn, an American friend of mine, said that she takes a book with her to such restaurants when she goes on cruises on her own. The book acts as a perfect "companion" that allows you to divert your attention to something between the courses and even while enjoying one so that you can comfortably slow down and truly enjoy the meal.
I will be going on Queen Victoria again in December for a quick stint of four nights and look forward to going back to Todd English: it will be Me Time in My Space.
Tuesday, 8 September 2009
Baltic ferry companies need to reinvent themselves
In the Port of Vaasa on the west coast of Finland, an old and rusty hulk of a ferry is waiting for demolition. In fact, it should have been scrapped a long time ago, but the Indian owners of the hulk and the Finnish environmental officials have a dispute over what to do with asbestos that is on board.
That hulk, now called C Express, was built in 1966 as Fennia and operated by Silja Line until the early 1980s. In its early days, it was regarded as an exceptionally fine vessel: after all, passengers had a heated indoor swimming pool, sauna, hairdressing salon, cinema and supermarket among the facilities on their disposal.
Compared to modern ferries, it was small, just 6,179 gross register tons as built, and its 299 berths were hardly adequate even in those long since gone days to cater for a maximum of 1,200 passengers it could take.
Still, the designers of Fennia had created the nucleus of cruise ferry: the ship itself should be an aspirational destination in itself. Gradually, but not without outright steps backwards, operators such as Silja Line and Viking Line developed the concept further. Ships became larger and offeed more choice in terms of bars and restaurants, but cinema and hairdressing salon have disappeared a long time ago from the to do list availble for cruise ferry passengers.
It is not unfair to say that what cruise ferries in the Baltic have today, Fennia had already 43 years ago. It was a benchmark design. And it is also not unfair to say that the ferry industry should create another Fennia - a vessel that brings something genuinely new to the disaposal of the passengers. The current concept is based on wining and dining - and largely self service.
The Baltic cruise ferry business saw its peak in the late 1980s before a recession in Finland and Sweden early in the next decade combined with a huge expansion of capacity by both two majors led to a crash in ticket prices. The aftermath of Estonia in 1994 and gradual increase in other affordable forms of travel negated the ferries the possibility to regain the position in the eyes of the public they enjoyed 20 years ago.
Every industry and every company needs to reinvent itself at some point. The cruise industry did so about 40 years ago and it has maintained the momentum: innovation that started from small first-generation purpose built cruise liners of that time continues with giants like Oasis of the Seas that offer facilities unthinkable all those decades ago.
The cruise ferry business in the Baltic presents a striking contrast: since the late 1980s, new ships have offered nothing really new and the business model of wining and dining itself has become tired.
Royal Caribbean International has started to operate cruises in the summer from Stockholm and obviously by doing so grasps part of the better-paying business from the ferry companies. The time time has come for the ferry companies to look at themselves with a critical eye and to regain the innovative thinking that was their hallmark from the late 1960s to the end of the 1980s.
Otherwise, their offering will become an increasingly cheap commodity that drfts down market in the eyes of the travelling public.
That hulk, now called C Express, was built in 1966 as Fennia and operated by Silja Line until the early 1980s. In its early days, it was regarded as an exceptionally fine vessel: after all, passengers had a heated indoor swimming pool, sauna, hairdressing salon, cinema and supermarket among the facilities on their disposal.
Compared to modern ferries, it was small, just 6,179 gross register tons as built, and its 299 berths were hardly adequate even in those long since gone days to cater for a maximum of 1,200 passengers it could take.
Still, the designers of Fennia had created the nucleus of cruise ferry: the ship itself should be an aspirational destination in itself. Gradually, but not without outright steps backwards, operators such as Silja Line and Viking Line developed the concept further. Ships became larger and offeed more choice in terms of bars and restaurants, but cinema and hairdressing salon have disappeared a long time ago from the to do list availble for cruise ferry passengers.
It is not unfair to say that what cruise ferries in the Baltic have today, Fennia had already 43 years ago. It was a benchmark design. And it is also not unfair to say that the ferry industry should create another Fennia - a vessel that brings something genuinely new to the disaposal of the passengers. The current concept is based on wining and dining - and largely self service.
The Baltic cruise ferry business saw its peak in the late 1980s before a recession in Finland and Sweden early in the next decade combined with a huge expansion of capacity by both two majors led to a crash in ticket prices. The aftermath of Estonia in 1994 and gradual increase in other affordable forms of travel negated the ferries the possibility to regain the position in the eyes of the public they enjoyed 20 years ago.
Every industry and every company needs to reinvent itself at some point. The cruise industry did so about 40 years ago and it has maintained the momentum: innovation that started from small first-generation purpose built cruise liners of that time continues with giants like Oasis of the Seas that offer facilities unthinkable all those decades ago.
The cruise ferry business in the Baltic presents a striking contrast: since the late 1980s, new ships have offered nothing really new and the business model of wining and dining itself has become tired.
Royal Caribbean International has started to operate cruises in the summer from Stockholm and obviously by doing so grasps part of the better-paying business from the ferry companies. The time time has come for the ferry companies to look at themselves with a critical eye and to regain the innovative thinking that was their hallmark from the late 1960s to the end of the 1980s.
Otherwise, their offering will become an increasingly cheap commodity that drfts down market in the eyes of the travelling public.
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