Royal Caribbean Cruises Ltd. said last week it had reached a settlement with Rolls-Royce over the pod-propulsion system on Celebrity Cruises' Millennium-class ships that would generate a net increase of approximately $65 million in income for the company's Q1 results.

RCCL in 2003 sued Rolls-Royce and Alstom Power Conversion, maker of the Mermaid propulsion pods, for $300 million after technical issues with the pods forced several Celebrity ships out of service and into drydock on multiple occasions.

In the suit, RCCL said that all four ships that have the Mermaid pods -- Celebrity's Millennium, Summit, Infinity and Constellation -- have had at least one mechanical or electrical problem with the components.

In a statement Jan. 11, RCCL said it had reached "a suitable and amicable resolution to the lawsuit."

RCCL also said the reliability of the pods' design has improved.

"We look forward to continuing our alliance with Rolls-Royce for many years to come," Dan Hanrahan, Celebrity CEO, said in the statement.

"Rolls-Royce has one of the best reputations for reliability, and guests and travel agents should feel confident in Rolls-Royce's assurances of the reliability of the Mermaid pods."

Carnival Corp. also sued Rolls-Royce, in 2008, for damages related to the Mermaid pod system on Cunard Line's Queen Mary 2.

In the $100 million suit, Carnival said that Rolls-Royce defrauded Carnival into the "selection, acceptance and continued use" of the Mermaid pod propulsion system, which caused repeated interruptions of cruises.

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