Norwegian makes Europe pay

Europe might have been “a bummer” for cruise giant Royal Caribbean – who last week reported a second-quarter loss – but the region is credited with improving Norwegian’s profits over the same period.
Company president and CEO Kevin Sheehan yesterday said the deployment of a record four of the fleet’s 11 ships to Europe had brought improved revenues. Higher fares and modest cost savings helped drive earnings up from $568.6 million to $583.2 million, with profits rising from $29.2 million to $36m.
The company has not, however, been immune to the effects of the Euro crisis and the sinking of Costa Concordia. Although it succeeded in keeping European fares high until early June, it finally had to lower them in response to pressure from competitors. The ships will remain on the Mediterranean and northern Europe for the rest of the season through to the end of the company’s third quarter so earnings will continue to come under pressure – much to Sheehan’s frustration.
“I’m still really frustrated, to be honest, with the way this year is turning out. We were teed up to have a really spectacular year,” he said.
At least he can console himself by looking forward to the arrival next year of the 4,000-passenger ship Norwegian Breakaway, the company’s first new vessel since the 2010 launch of Norwegian Epic.
Breakaway, under construction in Germany, will make a brief visit to Southampton next April, but will be based in New York from May. Sister ship Norwegian Getaway, scheduled for launch in 2014, will sail year-round from Miami.