Travel Weekly's Cruise E-letter: July 31, 2007

ROYAL CARIBBEAN CRUISES LTD. reported a 5% increase in second-quarter earnings this year, citing improved ticket sales and Caribbean pricing and better demand for close-in bookings. The company recorded $128.7 million in net income, despite higher than expected fuel costs. The results improved upon the company's first quarter results, when it reported a 93% drop in net income compared with first-quarter 2006. Brian Rice, RCCL's CFO, said that the overall revenue environment had been improving after "a rough first quarter," particularly for sales of higher-end balcony and deluxe accommodations. RCCL reported $1.5 billion in revenue in the second quarter, a 15% increase over the same period last year.

DURING A CONFERENCE CALL, RCCL brand Celebrity Cruises said that having to cancel two cruises after the Millennium's propellers were damaged when they collided with submerged rocks near Villefranche, France, on July 2, would cost the company approximately $0.14 per share. Celebrity CEO Dan Hanrahan later said that the "frustrating" incident was caused by a computer glitch related to the software in the control system for the port propulsion system, and that the line had since corrected the problem on the Millennium and on other Celebrity ships with the same software system. The glitch caused the ship to go into reverse while it was anchored, causing the vessel's propellers to hit nearby rocks.

 

FOUR CRUISE PASSENGERS and the pilot of a floatplane died when the plane crashed during a sightseeing excursion near Ketchikan, Alaska, last week. The four passengers were on the Misty Fjords Seaplane excursion at the time of the accident, on the second day of a seven-day roundtrip cruise from Seattle on Princess Cruises' Sun Princess. The flight, which was operated by Taquan Air, crashed in the Misty Fjords National Monument, a forest area in Southeast Alaska. The cause of the accident is under investigation.

CARNIVAL CRUISE LINES will operate out of the Port of New Orleans until at least October 2008 and possibly until 2010, according to a contract that it signed with the port. Retroactive to October 2006, the terms of the contract say that Carnival will sail regularly from New Orleans on the 2,056-passenger Carnival Fantasy, making at least 70 annual calls at New Orleans' $37 million Erato Street Cruise Terminal on four- and five-day cruises to the western Caribbean.

SMOKING WILL BE PROHIBITED in all cabins and one lounge on each ship in the Royal Caribbean International fleet beginning in January. The new smoking policy will go into effect on 18 of the line's 21 ships initially, and then be added to the Legend of the Seas, the Rhapsody of the Seas and the Splendour of the Seas in summer 2008. Smoking will still be permitted on cabin balconies. The company said that the changes reflect a more contemporary approach to healthier lifestyles.

Cruise E-Letter Editor: Johanna Jainchill

Phone: (201) 902-2065

[email protected]

For promotional opportunities in the E-letters, contact [email protected].

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