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Royal Caribbean faces rising fuel bill
Royal Caribbean Cruises has recorded a “solid” first quarter but still has to contend with rising fuel costs.
The US parent of Royal Caribbean International and Celebrity Cruises achieved net income of $119.5 million against $137.1 million in the same period last year before the cumulative effect of a change in accounting principle, the company said.
First quarter revenues were down to $1.1 billion from $1.2 billion in the same three months of 2005.
Fuel prices averaged $418 per metric ton compared with $284 a year ago. Current “at the pump” prices are $432 per metric ton, 21% higher than last year’s average price of $358. On that basis, the company estimates its 2006 fuel costs will rise by around $105 million.
Royal Caribbean said the pace of bookings and consumer demand for the year remained positive and forecast net yields to increase by between 3%-4% compared to 2005.
But net cruise costs are expected to rise by between 5%-6% due to higher fuel charges, ship refurbishments, additional costs of opereating in Cozumel following hurricane damage to a ship and general inflationary pressures.
Chairman and chief executive Richard Fain said all key elements of the business performed well in the first quarter “and we were able to exceed our previous expectations”.
The figures come a week before the line brings Freedom of the Seas, the world’s largest cruise ship, to Southampton for a trade preview and to host the annual Passenger Shipping Association dinner.
Report by Phil Davies
Phil Davies
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