A sponson is the extension of the hull on the sides of a vessel. These mostly are reserved for Ro/Ro vessels as they contain a large, unrestricted vehicle deck.  An example can be seen in the Ro/Ro ferry Princess of Scandinavia right. The addition of Sponsons can be unappealing to a vessel. This is another reason that cruise ships resort to a duck tail.  

This month saw the drydocking of 3 ships and the addition of ducktails to two of the ships. P&O’s Arcadia at the Blohm & Voss shipyard in Hamburg, Germany received hers below.

At the same time in the same shipyard, Cunard’s Queen Mary2 was going through her routine Drydock.

The QM2 will leave on December 5th and the ORIANA will leave December 17th.

On the other side of Europe, in Cadiz, Royal Caribbean’s Splendour of the Seas is going through a rather massive drydock. A lot of interior changes are being made as well as the addition of an entire row of balconies to the ships superstructure. Her duck tail is rather more pronounced. Here it is all painted.

[1] Contemporary ideas on ship stability By Dracos Vassalos

Photos from SHIPS & THE SEA – BLOGUE dos NAVIOS e do MAR

Everyone’s freaking out in the media right now about Royal Caribbean adding a second Starbucks @ Sea to their fleet. Now maybe I just don’t get it since I am ethically against Starbucks to begin with, but is it really that big of a deal or is it just a slow news week?

Two weeks ago, we reported on Royal Caribbean’s Q3 earnings. The results were kind of melancholy. Not good, not bad, just ‘eh.’

Afterwards, UBS analyst Robin Farley interpreted the situation as ‘not terrible, not great, but perhaps a situation that seems to be fluctuating rapidly.’ Also stating that this is ‘the most uncertain we’ve ever felt.’

All of this seems to be brought on by Royal’s decision to reduce capacity in Europe in 2012. Keep in mind, however, that 2011 saw 11 ships alone sailing from Barcelona. And these are 11 huge ships. Not the typical European size ship. Norwegian Epic was among them. Of course there was going to be a bubble in Europe. Recent debt crisis’ over there probably popped that bubble.  It should be no surprise that any line will want to limit berths sailing to Europe.

Just like they did in the Mid-2000’s when Alaska’s market capped out!

My guess. We’ll see a boom in North America markets, mostly out of the U.S.. Then in a few years, they’ll be a new hot spot that everyone sends their ship to.

Some Highlights with the full results below:

• Net Income grew 14% to $399 million.
• Net Yields increased 5.3%
• Revenues improved to $2.3 billion
• strong demand for its Caribbean and Alaska products
• increases in excess of 15% in ticket yields and Alaska
• Bunker pricing for the third quarter was consistent with earlier calculations at $608 per metric ton and consumption was 333,000 metric tons.

Full release after the break:

Royal Caribbean Cruises Ltd.  today reported its third quarter 2011 results and updated its outlook for the remainder of the year.

Revenue yields, expenses and operating income all performed better than expected during the quarter.

As a result, year-over-year Net Income grew 14% to $399 million.  Included in third quarter results is an $0.08 per share charge in Other Income/(Expense) related to mark-to-market revaluations of the company’s fuel option portfolio.

For the full year, the company’s profit expectations have remained stable except for this revaluation charge and changes in currency exchange rates.

Key Highlights:

Results For the Third Quarter 2011:

Net income was $399.0 million, or $1.82 per share, versus $350.2 million, or $1.61 per share, in 2010;

Net Yields increased 5.3% (2.6% on a Constant-Currency basis.)  Net Cruise Costs per APCD (“NCC”) excluding fuel increased 2.5% (0.7% on a Constant-Currency basis.)

Year Guidance:  For the full year 2011, the company’s Constant-Currency Net Yield improvement expectations are essentially unchanged at 2% to 3%.  Including currency movements, full year Net Yields are expected to  increase approximately 4%.

Full year 2011 EPS is expected to be within a range of $2.70 to  $2.80, a $0.15 reduction from prior guidance primarily due to the strengthening of the U.S. Dollar and the fuel option revaluation  loss.

2012 Outlook: Though economic uncertainty is elevated and it is still early in the booking cycle, 2012 demand thus far has been solid.  Booked  load factors and pricing are both running ahead of this time last year, which supports the company’s expectation of continued yield accretion during 2012.

“It was gratifying to beat both our revenue and cost forecasts in the third quarter despite the turmoil in the worldwide financial markets,” said Richard D. Fain, chairman and chief executive officer.  Fain continued, “The strength of our brands, combined with the value of our product, provides us with a high degree of economic resilience, and both our 2011 results and our 2012 booking patterns validate this.”

Third Quarter 2011 Results

Royal Caribbean Cruises Ltd. today announced net income of $399.0 million, or $1.82 per share, versus $350.2 million, or $1.61 per share, in 2010.  Results include an $0.08 per share mark-to-market revaluation loss on the company’s WTI fuel option portfolio.  Absent the revaluation charge, third quarter earnings per share totaled $1.90.

Revenues improved to $2.3 billion in the third quarter of 2011 compared to $2.1 billion in the third quarter of 2010 as a result of capacity increases and yield improvements.  Net Yields for the third quarter of 2011 increased 5.3% (2.6% on a Constant-Currency basis).  The company experienced particularly strong demand for its Caribbean and Alaska products during the third quarter with both markets experiencing increases in excess of 15% in ticket yields and Alaska yields reaching a historical high.

Costs in the third quarter of 2011 remained under tight control with NCC excluding fuel increasing only 0.7% on a Constant-Currency basis (2.5% on an as-reported basis).

Bunker pricing for the third quarter was consistent with earlier calculations at $608 per metric ton and consumption was 333,000 metric tons.  During the quarter the company booked an $0.08 per share mark-to-market revaluation loss on its WTI fuel option portfolio.  This loss partially offsets the revaluation gains the company recorded earlier in the year.  As previously noted, these fuel options have been entered into for the purpose of protecting the company against spikes in oil prices.  However, the options are not treated as hedges for accounting purposes and therefore can cause swings in quarterly earnings.  Overall, they have been a successful strategy despite the swings they have caused.

2011 Outlook

The company provided the following updates to its forward guidance:

Revenue:

Constant-Currency yield growth expectations for the year are unchanged at 2% to 3%.  Recent strengthening of the U.S. Dollar has reduced full year 2011 as-reported Net Yield expectations slightly to an increase of approximately 4%.  For the fourth quarter, the company expects Net Yields to increase 3% to 4% on both an as-reported and a Constant-Currency basis.  Close-in demand was strong in the third quarter, but the company does not anticipate this strength will continue for the seasonally weaker fourth quarter.

Expenses:

For the full year, the company expects NCC excluding fuel to increase 2% to 3% on an as-reported basis and 1% to 2% on a Constant-Currency basis.  The comparable figure for the fourth quarter is expected to be approximately 4% on an as-reported basis and 3% to 4% on a Constant-Currency basis.

Fuel Expense:

The company does not forecast fuel prices and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on today’s fuel prices the company has included $204 million and $761 million of fuel expense in its fourth quarter 2011 and full year 2011 guidance, respectively.

Forecasted consumption is now 57% hedged via swaps for the remainder of 2011 and 55%, 47%, 30% and 20% for 2012, 2013, 2014 and 2015, respectively.  For the same five-year period, the average cost per metric ton of the remaining hedge portfolio is approximately $490, $520, $520, $575 and $580, respectively.

In addition to the above-mentioned fuel hedges, the company also utilizes fuel options to further protect against escalating fuel prices.  The company recently sold its options for 2012, which were at a strike price of $100 and will recognize an associated small gain in the fourth quarter. The remaining WTI fuel option portfolio consists of options expiring in 2013 at a strike price of $90 bbl that covers an estimated 11% of 2013 consumption.

Naturally, passengers flock to the closest media medium to post about it: CruiseCritic I’ve been incredibly vocal in my absolute revulsion for the site and in cases like this my views are confirmed. They just posted the article: Why Did Freedom of the Seas Sail Into a Storm Two Other Cruise Ships Avoided?

Yes CruiseCritic, RCI and their extremely experienced crew decided to forego passenger safety and sail into a storm on purpose. Obviously its sarcasm here (I don’t want RCI upset with me.)

Their argument in the article mostly focuses around the following:

“two other vessels — Disney Dream and Carnival Sensation — delayed their departures until weather conditions calmed”.

RCI fired back via their spokeswoman Cynthia Martinez:

“Freedom of the Seas was the first ship scheduled to leave Port Canaveral on Sunday — making it something of a guinea pig. ‘When Freedom of the Seas departed Port Canaveral, the port was still open and the pilots were still taking ships out’ ”

I think its also important to note that Freedom has further to go  has a significantly deeper draft [7.9m vs 8.53m]. Besides, if the port is open, its captains decision. He knows his ship better and knows what she can and cant handle.

Carnival’s take was the following:

"We felt it was best to keep the ship in port until conditions improved for the comfort of the guests and crew," explains spokeswoman Jennifer De La Cruz.

As any experienced mariner will tell you, the most dangerous place to be in, in a storm is along the pier. There is so much that can snap, break, and objects the ship can slam into. Why do you think that when a hurricane is approaching, ports close down and ships flee for open water?

Anyways, here are photos of the inside of the Freedom. You’re on a ship. IT MOVES. That’s what they do!

UPDATE: We got video. Notice how the ships railing tends not to move in relation to the horizon. Freedom is 4 wave lengths in, well, length. This helps minimize the total movement of the ship. Stabilizers help too, but I doubt they were deployed in this rough of weather.

From CIN:

Sources also report that TUI is close to ordering ships from STX Finland. While the shipyard was not immediately prepared to comment, it would be a stretch for TUI to commit funds to a newbuilding, considering TUI posted a loss for the first nine months of its fiscal year, and the German market may be approaching a saturation point. Royal Caribbean’s commitment to restoring its credit rating would also restrict its spending, especially in these challenging geopolitical and economic times.

 

I don’t think they will build. Not with the Celebrity Century still sailing for Celebrity. Remember the other two ships in the TUI/Mein Schiff fleet are both former Celebrity Century class vessels.

“Anti-cruise” pundit Jim Walker over at Cruise Law has reports that yet another group has filed a suite against RCI for fraud stemming from RCI’s admission of an accounting error. While this certainly wont turn into a scandal or anything juicy, it certainly isn’t good for Royal Caribbean PR.

(Photo Credit: Flickr user GoboNdc via Creative Commons license)

From FAIRPLAY24

ROYAL Caribbean’s two largest owners – Norway’s Wilhelmsen family and America’s Pritzker family – have dissolved their shareholders agreement, the cruise giant confirmed. The Wilhelmsen family, through A Wilhelmsen AS, owns 19% of Royal Caribbean. The Pritzkers, through Cruise Associates, own 15%. For many years, the two owners agreed to vote their shares for four board nominees of the other. Royal Caribbean confirmed after market close yesterday that this arrangement has ended. Royal Caribbean’s articles of incorporation required the approval of at least one board member from each family for certain corporate actions. Now that the Wilhelmsen-Pritzker pact has been dissolved, the cruise company no longer requires such approval. The Pritzker family’s business holdings are controlled by a collection of trusts. Royal Caribbean said: “It is our understanding that with the termination of the shareholders agreement, Cruise Associates plan to distribute its Royal Caribbean shares to its partners which, in turn, may further transfer shares to their respective owners.” Royal Caribbean maintained that the situation does not imply that either family has a negative view of the industry, nor is it related to financial turmoil. “We understand that this is simply a private matter between the two parties,” it said. The question ahead is whether the demise of the shareholders agreement is a precursor to ownership divestments by either of the two owners – for example, portions of the Pritzker family. “We have no information about the ongoing intentions of the two shareholders,” Royal Caribbean said.

So what does this mean to the end cruiser? Absolutely nothing. What does this mean to the industry. Probably nothing but it is interesting this news comes a month after RCI disclosed an accounting error and executives face a claim of stock fraud. BUT in reality its probably more tied into the tanking economy and the looming thread of a second recession.

When Royal Caribbean International (NYSE:RCL) announced their 2Q 2011 Earnings they shocked everyone by admitting that their erred in their accounting. Upon hearing this, the stock plunged yesterday quite a lot. It should pick up today assuming it’s a good day for the market, but with the looming debt crisis, its gonna be a long ride uphill for the Miami based line.

Heres what they reported:

(1) Management identified an error in the previous accounting treatment of interest expense relating to its amortization of certain financing fees and has revised its past financial statements to reflect the correct accounting (the "Interest Expense Revision").

(2) Second quarter EPS was 47 cents before the Interest Expense Revision. After adjusting for the revision, the company reported earnings of 43 cents per share which is the midpoint of previous guidance range of 40 cents to 45 cents.

(3) Excluding the Interest Expense Revision, full year 2011 EPS guidance is now expected to be $3.05 to $3.15, reflecting a 10 cent reduction to prior guidance on continuing pricing softness for Eastern Mediterranean sailings, partially offset by strong cost savings. The Interest Expense Revision is forecasted to reduce 2011 EPS by 20 cents resulting in full year 2011 EPS guidance of $2.85 to $2.95.

(4) The Board of Directors reinstated the quarterly dividend at a rate of 10 cents per share.

you know, at least they admitted their error instead of burying it in other accounting figures that barely anybody understands *cough* Enron *cough*