Carnival Corp. plans to commission two 3,600-passenger ships for Princess Cruises, which had been the company's only brand without a vessel on order.
Carnival said last week that it had signed a memorandum of agreement with Italian shipbuilder Fincantieri for the construction of two ships to enter service in spring 2013 and spring 2014, subject to the execution of a definitive contract, financing and other customary closing conditions.
The new ships were ordered in euros, at an all-in cost of approximately $212,737 per lower berth. The 139,000-ton vessels would become the largest in the Princess fleet.
Carnival Corp. has been hinting for months that it would expand the Princess brand, but it instead surprised Wall Street in early December with a ship order for its largest brand, Carnival Cruise Lines.
That order was the cruise industry's first in 20 months.
Micky Arison, Carnival Corp.'s CEO, said at that time that the company was hoping to place an order for Princess by the end of January; he said the delay for a Princess order was due to the fact that the Princess vessels would be prototype vessels for a new class of ship, while the Carnival order was the third in an already-designed class.
Princess last took delivery of a new ship in 2008, the 3,080-passenger Ruby Princess, the 17th ship in its fleet.
Until the debut of the Ruby, the line had sustained years of rapid growth. In 2004, for example, Princess took delivery of three, 3,000-plus-passenger ships in a 90-day period: the Caribbean Princess, Diamond Princess and Sapphire Princess.
Leisure equity analyst Tim Conder of Wells Fargo Securities last week noted that the timing of the announcement was favorable given the recent weakness of the euro.
He also said that the ship order demonstrated the strength of Carnival Corp.'s balance sheet.
"We believe [Carnival] is the only major industry player with the financial strength to order new ships through [2011]," Conder wrote.
A reduction in ship deliveries over the next few years, he said, could enable lines to raise cruise prices.