Carnival Corp.'s latest Aida, Costa orders cheaper per berth

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The per-berth costs of the new ships ordered for two of Carnival Corp.'s European lines are less than either of the lines' most recent orders, analysts said.

In Costa Cruises' case, the new, 3,700-passenger ship will be constructed by Italian shipbuilder Fincantieri for $215,000 per berth. By comparison, the per-berth cost for the 3,700-passenger Costa Fascinosa, due to be delivered next spring, was 15% higher.

The Fascinosa was part of a two-ship order placed in 2007, along with the Favolosa, and is under construction at Fincantieri's shipyard in Marghera, Italy.

Carnival's order for two 3,250-passenger ships for its Aida Cruises brand, placed with Mitsubishi Heavy Industries in Nagasaki, Japan, will run about $200,000 per berth.

UBS analyst Robin Farley said that the Aida newbuilds will cost about 7% less per berth than that line's most recent order, in 2010, for a ship accommodating 2,192 passengers. That ship is under construction at Germany's Meyer Werft shipyard and due to enter service in 2013.

Analyst Tim Conder of Wells Fargo Securities said the per-berth costs "appear very favorable" considering that the ships represent a new design for Aida.

The Aida order marks Carnival Corp.'s first scheduled delivery for 2016 and continues the company's strategy of introducing two to three ships per year. It now has 10 ships on order for its various brands.

The order for the two Aida ships also represents a return by Carnival Corp. to Japan. Mitsubishi Heavy Industries built two ships for Princess Cruises, the Sapphire Princess and the Diamond Princess.

The Sapphire Princess was damaged in a fire while under construction, but the ships were delivered in 2004 to favorable reviews from Carnival executives. The yard has not handled any business from U.S. cruise companies since the Princess orders.

Carnival said that its new contract with Fincantieri "continues the company's long-standing relationship with the Italian shipbuilder, which dates back nearly 20 years."

The company did not respond to a query about why it chose Mitsubishi, rather than a European yard, to construct its Aida ships.

The delivery of the new Costa ship is expected to replace capacity from the sale of certain older Costa ships, beginning with the sale of the 772-passenger Costa Marina, which will leave the fleet in November.

Carnival Corp. said that the new Costa ship order is subject to financing and that the memorandum of agreement with Mitsubishi is subject to customary closing conditions, including execution of shipbuilding contracts and financing.

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