Kevin Sheehan, Norwegian Cruise Line By Johanna Jainchill / March 15, 2010 Share 1 -- Norwegian Cruise Line made a full-year profit in 2009 for the first time since 2005 and recently announced that it would raise cruise prices. Cruise editor Johanna Jainchill asked NCL CEO Kevin Sheehan about what the company has done to cut costs, synergies it has with its sister cruise lines, and why it was able to raise fares.Q: Reducing your Hawaii operations helped your bottom line last year. Will the real challenge be maintaining profitability this year and next? A: We adjusted our proposition and removed two ships from Hawaii in 2008. That effort is long in the past. Our new strategy that includes having those two ships now in Europe and South Florida continues to go well for the company. We see 2010 to be a strong year compared to 2009, and we have complete confidence that 2011 will be even stronger. Q: In what categories are you seeing increases in onboard revenue? A: When I came to the organization [in 2007], we took a close look at all of our offerings. We stepped back and evaluated our execution to be smarter, better and more efficient, which we have now done in 2009 and continue to do in 2010. We continue to see the benefits of those efforts, which span every offering on our ships, particularly shore excursions, casino and beverages. Q: You got your cruise costs down 17.4% for the year. In what areas did you see the biggest savings? A: If you look at our income statement, we had a lot of rigor across the board in our business in 2009. This was especially important given the economic situation that we faced last year. We continue to learn and improve on our processes. We strive to achieve the most efficient balance of rigor while protecting the customer-facing offerings. Q: By having shared ownership with Oceania and Regent Seven Seas, are you sharing best practices with those cruise lines? A: It's important to share best practices from a cost standpoint with Regent and Oceania, which we do. In addition, we have a vast array of opportunities given our 50% ownership by Apollo. We continue to benefit by working across the spectrum of companies. Q: Roberto Martinoli [who became NCL's president and COO in April 2009] has worked closely with Apollo. Is he bringing anything that he learned with them to NCL management? Has that contributed to a more streamlined operation? A: With Roberto, we've really tapped more into his vast experience as a cruise industry veteran. He's a breath of fresh air for the company, because we never had someone with so much cruise industry experience at that level. He's extremely focused on enhancing and improving our overall operations and delivery of our Freestyle Cruising product across the fleet. Q: You raised your prices just after Carnival did. Did their move influence your decision? A: Not really, although it reconfirmed the data we were seeing. Our decision, at the end of the day, was based on the tremendous Wave season we experienced, the health of our booking curve and the early indications that we see in the economy. Our pricing is dictated by our revenue management systems. Of course, we are always looking to increase our pricing, especially given the undervaluing of our pricing in the market today. We'll continue to seek more pricing increases in the future.