Princess Cruises redeploys ships to Caribbean

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NEW YORK -- P&O Princess Cruises, parent of Princess Cruises, became the second major cruise line to announce ship redeployments as a result of the Sept. 11 terrorist attacks.

The re-deployments by P&O, cruising's third-largest operator, follows last week's move by Norwegian Cruise Line, the fourth-largest operator, which shifted two ships to the Caribbean for 2002.

The 1,200-passenger Royal Princess, originally slated to offer a world cruise and an eastern Mediterranean series, instead will offer roundtrip Panama Canal cruises from February to April 2002. The 2,010-passenger Sea Princess, scheduled to offer southern Caribbean cruises from January to April 2002, will instead offer Mexican Riviera sailings from Los Angeles.

Princess oldest ship, Pacific Princess (640 passengers) will be removed from service from Nov. 2001 to May 2002, when the ship will resume Bermuda sailings. And Pacific Princess is still scheduled leave the company's fleet in Oct. 2002, when it is delivered to new owners.

The re-deployments were made to "Accommodate the anticipated reduction in demand from North American passengers for cruises in the Indian Ocean, Middle East and Africa region," according to a company statement. The changes are also aimed at "[taking] advantage of our strength in the local Californian market."

P&O officials expect the re-deployments to cost the company $5 million in net revenues "based on the yields we achieved in 2001 on the equivalent itineraries." The company also switched $350 million in long-term borrowings from fixed to floating-rate interest to take advantage of lower short-term interest rates, a move that will reduce interest costs by $7 million in 2002.

Meanwhile, in a brief update of the company's post-Sept. 11 operations, P&O Princess officials said fleet occupancy "steadily increased throughout last week as air services returned to normality" with seven Princess sailings departing between Sept. 21 and Sept. 24 averaging 92% occupancy.

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