No boost from Breakaway's debut, Norwegian CEO says

By By Tom Stieghorst
The New York debut of the Norwegian Breakaway in May didn't generate the boost to bookings that its predecessor, the Norwegian Epic, did, a possible sign of how interest in cruising has waned after the Carnival Triumph incident.

Speaking to analysts, Norwegian CEO Kevin Sheehan said that when the Epic was launched three years ago, there was a huge increase in bookings across Norwegian's fleet.

"We expected the same sort of halo effect," Sheehan said of the Breakaway. "What happened was, we didn't see it."

The Breakaway did have a modest positive effect on bookings, but nothing like what was anticipated based on Epic, Sheehan said.

"That's when it started to feel a little bit different to me," he said.

Sheehan's comments followed those made by Royal Caribbean Cruises Ltd. Chairman Richard Fain a week earlier that the impact of the downdraft from the Carnival Triumph was greater than he first anticipated.

Analysts said cruise promotions have been stepped up, especially in the Caribbean over the past month or so.

Still, Norwegian would have reported improved earnings for the second quarter had it not been for some costs incurred to refinance its debt at lower interest rates.

Norwegian Cruise Line Holdings reported a net loss of $8.8 million in the quarter, reversing a $36 million profit a year earlier. Without the premiums paid to redeem debt early and other one-time financial costs, Norwegian said it earned $60.2 million in the quarter.

Revenue rose 10.5%, to $644.4 million, aided by stronger onboard spending.

Simultaneously with the second quarter results, the three principal owners of Norwegian Cruise Line announced plans to reduce their stake in the company from 87% to 77% by selling 20 million shares.

Genting HK, Apollo Funds and TPG Viking Funds would reap about $600 million at the current stock prices of about $30, after taking the company public in January at $19 a share.
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