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Europe the silver lining for Carnival
Increased revenue yields from Carnival Corporation’s European brands helped offset price pressure in the Caribbean and rising fuel costs in the last quarter.
The world’s largest cruise conglomerate reported net profit up year-on-year by just $10 million to $390 million in the three months to the end of May, based on revenues up by almost 9% to $2.90 billion. This was mainly driven by a 9.2% rise in cruise capacity.
Net revenue yields are predicted to be up by only 1% for the full 2007 financial year, with “significantly increased” fuel prices reducing profits estimates for the year.
As the company moves into the summer peak it has less capacity devoted to the Caribbean, a region which continued to experience pressure on prices.
Chairman and chief executive Mickey Arison, reviewing a period which saw the launch of new ships for Princess Cruises, AIDA Cruises in Germany and Costa Cruises, said: “The decision to expand our European cruise business is working, with the strength of our European brands offsetting some cyclical weakness in the contemporary segment of North America.
“Our North American brands brands are enjoying strong European and Alaskan programmes and our European brands are performing well against strong comparisons last year.”
He added that pricing for Caribbean sailings for the second half of the year appeared to have stabilised with booking volumes for Carnival Cruise Lines, which operates predominantly in the region, up by 18% year-on-year.
The group expects its planned joint ventures with TUI in Germany and Iberojet in Spain to be completed in the second half of 2007, subject to any regulatory review.
by Phil Davies
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