March 23, 2005

Celebrity cancels Hawaii cruise

Royal Caribbean International's Celebrity Cruises is canceling one cruise on Infinity to replace the starboard thrust bearing in the ship's propulsion system. The ship must enter dry dock to replace the bearing, which will result in the cancellation of its March 27 sailing. The ship is expected to return to its scheduled sailings on April 6.

The canceled sailing, scheduled to depart this Sunday, is a 10-night cruise from Ensenada to Honolulu. Infinity is currently sailing a 14-night trans-Canal cruise that will end in San Diego, Sunday, as scheduled.

Guests booked on the canceled sailing will receive a full refund and free Celebrity cruise of 10 nights or less, departing on or before March 27, 2006, excluding holiday and Celebrity Xpedition sailings. Travel agents will receive full commissions for the cancelled sailing, plus a $50 rebooking fee per stateroom when their clients reschedule their cruise.

"I apologize to our guests who are affected by this cancelation," said Dan Hanrahan, president of Celebrity Cruises. "Although the ship continues to operate safely, this is a matter that must be addressed now. An unscheduled dry dock can never happen at a good time and I am sorry about the disruption to our guests' vacations. We will do everything we can to assist them."

Celebrity has established a special Help Desk to assist guests and travel agents with rebooking, air transportation and other issues. That toll-free number is 1-888-837-5676.

The canceled cruise is expected to have a negative impact on the earnings of Royal Caribbean Cruises Ltd. of $.03 to $.04 per share.

The Infinity is fitted with the Mermaid podded drive system.

This latest propulsion problem is one in a series that have plagued Celebrity. Last year, a September Alaska cruise by the sister ship, Summit, had to be canceled for repairs to be made to a radial-bearing unit in the ship's starboard propulsion system that was showing premature wear.

In August 2003, Celebrity Cruises filed a $300 million lawsuit in Florida state court asserting that the Mermaid pods installed in four vessels had "failed repeatedly."

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