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TAKE-OVER TANGO Of course, the time honored way in which cruise lines have added capacity is by hitting the take-over trail. One of the industries more complex take over battles now looks to be just about over. On January 8, the board of P&O Princess recommended that shareholders sign off on the “DLC” transaction with Carnival. DLC stands for “dual listed company.” The DLC transaction is a means of enabling P&O Princess and Carnival to combine their management and operations as if they were a single economic enterprise, while retaining their separate legal identities. This will be accomplished through contractual arrangements and amendments to each company’s constitutional documents. As part of the DLC transaction, P&O Princess intends to change its name to Carnival (UK) plc The DLC structure will allow P&O Princess shareholders who are required, or wish, to hold shares in a UK-listed company included in the FTSE indices to continue to do so and, as a result, to continue to participate as a shareholder in the global cruise industry through P&O Princess. The combination of P&O Princess and Carnival will produce the largest cruise vacation group in the world, based on revenues, passengers carried and available capacity. Its brands will include Carnival Cruise Lines, Princess Cruises, Holland America Line, P&O Cruises, Costa Cruises, Cunard Line, Seabourn Cruise Line, Windstar Cruises, AIDA, A’ROSA, Swan Hellenic, Ocean Village and P&O Cruises (Australia). It will operate a fleet of 65 cruise ships offering 99,964 lower berths, with 18 additional cruise ships with 42,260 lower berths scheduled to be added over the next three and a half years, and will be a leading provider of cruises to all major cruise destinations outside the Far East. The combination is expected to cut costs by at least $100 million, primarily in purchasing and by consolidating certain support functions, P&O Princess Chief Executive Peter Ratcliffe said. Layoffs are not expected to be significant. “There will be some changes that will take place, but we're going to try to do that in a way that is as helpful and as creative as we can possibly be,” Ratcliffe said in an interview with Cantos, a U.K.-based financial PR service. This time last year, of course, the story was very different, with a then proposed combination of P&O Princess and Royal Caribbean looking almost unstoppable. At that time, P&O Princess seemed to view Carnival’s Micky Arison not so much as a Prince Charming as a spoiler. How things have changed. “On a personal note, I have known Micky Arison for many years and we share similar values and pride in our respective companies,” said Lord Sterling of Plaistow, Chairman of P&O Princess. “I have every confidence that the future bodes well for all involved.” FROM HULA TO LIMBO So, you thought the Project America plan to build two cruise ships for the Hawaiian market was over and done with when the deal was done to sell one half completed ship and the materials for the second to NCL at a bargain basement price? When last heard of, Northrop Grumman’s Ingalls unit was getting the first ship completed to the point where it could be towed quietly away to Germany for completion. When it comes to the Passenger Vessel Services Act (the Jones Act look alike that covers passenger transportation) it seems to be the Limbo, not the Hula, that is Hawaii’s national dance and its greatest Congressional exponent is Senator Daniel Inouye. He slipped a provision into the Omnibus Appropriations Act of 2003 that, gives NCL pretty much all the privileges that American Classic Voyages was to get in return for building two cruise ships in a U.S. yard. Under Inouye’s provision, NCL will be able to slap the U.S. flags on the two Project America newbuilds and also on a third, existing, foreign-built ship with U.S. colors to secure its foothold in the Hawaiian interisland market. It’s a nice deal for NCL which is already established in the Hawaiian market, but whose itineraries now have to include a foreign destination—the none to convenient Fanning Island. Sticking the U.S.-flag on a ship should not be a problem for NCL. It certainly has plenty on its website as part of its promotion for its “Homeland Cruising” program. This is NCL’s name for a concept that most cruise lines have found to be popular with customers: operating ships from ports that customers can drive to without having to go through the misery of the aviation experience. Currently, NCL is offering “Homeland Cruising,” either year round or seasonally, from 12 U.S. ports. ML PREVIOUS Recommend This Page Enter an email address HOME