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Profits are down , too much capacity in Hawaii, occupancy is down, costs are up.
Same at Star another huge loss last year, albeit they took a write off for Orient Line and Marco Polo but even allowing for that not good at all.
At a time when all the players in the market are in effect raking it in, when the market is growing at record pace, new builds are being launched at nearly one a month to handle increased business NCL seems again to be going astray, the only one of the top companies to be loosing money, again.
One money saving idea they seem to have implemented is by deferring dry docks, hardly good for the hardware.
So how long will NCL be owned by Star, will they ever have the balls to float on the stock market (which I suspect was what Star wanted from day 1, get NCL making cash, float it and make a killing) - not likely much as they talk about it with results like these someone would launch a take over in 5 minutes and in all likely hood the shareholders would take it.
Next move, abolition of the Jones Act, they agree to a reduced number of US crew on board NCLA ships and possibly register them outside the US. They then can redeploy the ships as required to different markets if they continue to struggle to fill them at high enough fares to run profitably.
The future for the Indi is going to be short and not sweet, the prospect of the Big U sailing again has now got to be even less than ever before. With prices softening in the Caribbean, Hawaii and Alaska NCL is going to have to find ways to move its fleet around to new destinations and quickly. I suspect they would be better off with a new owner who knows more about the cruise business than casinos. A real shame, they have some nice ships now, what they now need to do is get them pay.
quote:Originally posted by mike sa:At a time when all the players in the market are in effect raking it in, when the market is growing at record pace....NCL seems again to be going astray.
I’ve not seen any data about NCL profits and capacity etc. However with eight newbuilds and more to come Star/NCL are clearly not thinking short term. They are not going to see any real profit until they have recouped the construction costs of the new fleet. Not to mention paying for the NCL America infrastructure such as the staff training School etc. I guess this will take at least a decade? However full ships will certainly help.
On a positive note they have virtually converted their rag-tag fleet into a state of the art one. I think that NCL are catching up with the big two and that their newbuilds compete very well in terms of facilities and ‘wow’ factor. I’m not sure if the food and service is up to the leaders standards yet – this is open to debate.
Yes great ships, state of the art etc. No point if they can't get a business model and product that people will buy into at a price point they can make money with - ESPECIALLY when every other operator living with exactly the same restrictions etc. CAN make money.
Ships that don't make money are more valuable as scrap................................................... Not that I am saying they should be at all just that something will have to give at NCL, you can't run a business at a loss for years on the trot in a positive business environment with all others doing well without asking what you are doing wrong and is there another way, which may include getting out of the business all together.
quote:Originally posted by mike sa:All the main players have to pay construction costs etc.
Of course, but Carnival and RCI are not updating their fleets as rapidly as NCL are. By the end of the decade NCL's will be the youngest major fleet. That's obviously going to be a very expensive project.
I'm not qualified to say if that is a wise thing to do in NCL/Star's financial position.
I'd like to see some figures on NCL's profit and losses.
quote:Originally posted by Malcolm @ cruisepage:Of course, but Carnival and RCI are not updating their fleets as rapidly as NCL are. By the end of the decade NCL's will be the youngest major fleet. That's obviously going to be a very expensive project. I'm not qualified to say if that is a wise thing to do in NCL/Star's financial position.I'd like to see some figures on NCL's profit and losses.
Malcolm,
The NCL, Wind, Majesty, and Dream are some of the worst ships out there.
RCL and Carnival have much better fleets. The old tonnage is deployed from backwater ports on 4 day cruises for people who want a short vacation.
If NCL wants to stay in the game they need to equal or better the big 2.
Hmmm, after the Norwegian Gem is online, the The NCL Majesty can cruise along side of the Carnival Holiday from Mobile, AL.
My point is the business plan/model they are committed to - NCLA is not going to turn around anytime soon and of course even if the Jones Act was abolished meaning they would not have to have so many expensive US crew every other operator will move into the market.
They predominently cruise in areas that are soft price wise, they NEED to move ships to markets in which they can charge a premium, mainly Europe, Asia, South America etc. Or they need a reason to get people to cruise NCL and pay more ! They need to move 1 ship out of Hawaii in order to drive fares up by reducing capacity - possibly the last thing they need is more ships right now unless they can dump the old tonnage faster.
The on board product needs to be slick, very slick in order to differentiate them from any other mass market line. Too many negative reports in terms of food and service. And admit that they will never need or want to put the US into service, sell her or give her to someone who will try and preserve her perhaps in New York.
What would stop the company from selling-off its fleet, and new-build contracts, to a prospective buyer, then liquidating the company?
quote:Originally posted by desirod7:The NCL, Wind, Majesty, and Dream are some of the worst ships out there. RCL and Carnival have much better fleets.
I agree, but NCL is in a better position now that they have eight newbuilds than they were a few years ago, assuming that they can fill them.
quote:Originally posted by mike sa:.. NCLA is not going to turn around anytime soon and of course even if the Jones Act was abolished....
The Jones act almost gives gives NCL a monopoly on Hawaiian inter-island cruises. I don't think that they would like to see it abolished after spending so much time and money to work around it.
The Jones Act should work in their favour if they can iron out the flaws.
[ 02-23-2007: Message edited by: Malcolm @ cruisepage ]
The older tonnage from any of the lines will do just fine calling from undeveloped ports such as Mobile, Galveston, Philadelphia, and Blackpool.
quote:Originally posted by Malcolm @ cruisepage:I agree, but NCL is in a better position now that they have eight newbuilds than they were a few years ago, assuming that they can fill them.
quote:Originally posted by desirod7:Look what happened to the SSNorway, and the Carnival Holiday is a floating Beverly Hillbillies episode.
A friend of mine made a comment on the one and only Carnival cruise (onboard the lovely Holiday) we sailed on; 'If this ship sinks, the Jerry Springer Show will lose most of the on air 'talent''. If QE2 transatlantic is a Fellini film, Holiday is the John Waters cult film 'Pink Flamingos'.
quote:Originally posted by lasuvidaboy:A friend of mine made a comment on the one and only Carnival cruise (onboard the lovely Holiday) we sailed on; 'If this ship sinks, the Jerry Springer Show will lose most of the on air 'talent''. If QE2 transatlantic is a Fellini film, Holiday is the John Waters cult film 'Pink Flamingos'.
Amen, My 1998 Regal Empress cruise was as bad the Carnival Holiday. On the engine room tours The hosts had to shut up the passengers since they drown out the sounds of the machinery.
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