STX France gets LOI for two Celebrity Cruises newbuilds

EDGE class ships will be slighly shorter and beamier than Celebrity's Solstice Class ships EDGE class ships will be slighly shorter and beamier than Celebrity's Solstice Class ships

DECEMBER 4, 2014 — Royal Caribbean Cruises brand Celebrity Cruises has signed of a letter of intent (LOI) with French shipbuilder STX France for two ships in a new class of vessels. Though Royal Caribbean did not disclose the price tag, a French media report quotes Laurent Castaing, Managing Director of STX France, as saying the order is worth about EUR 1.2 billion. That's roughly $1.474 million at current exchange rates.

The two 2,900-guest, 117,000-gross-registered-ton ships, developed under the project name "EDGE," will build upon the modern luxury experience of the brand's Millennium and Solstice class vessels. At 984 feet long, 123 feet wide and 190 feet high, the Project EDGE cruise ships will be slightly shorter and beamier than the 1,041 ft Solstice class ships and will carry just 50 more passengers.

Celebrity Cruises say they will "deliver small ship itineraries with large ship amenities, a perfect vacation experience in step with today's premium vacationer."

"The addition of two project EDGE vessels to our fleet delivers on our long-term strategic plan of moderate capacity growth, and continues the positive momentum the Celebrity brand has achieved in the premium segment of our industry," says Richard D. Fain, Chairman and CEO of Royal Caribbean Cruises Ltd.

"Our new class of ship will set the standard for premium world travel and deliver the next generation of modern luxury experiences that our guests know and love," says Michael Bayley, President and CEO of Celebrity Cruises. "STX France designs and builds some of the most innovative and stylish cruise ships in the world, and project EDGE offers them the opportunity to again set a new standard for modern iconic architecture. On this stunning new ship we will bring our guests even closer to the must-see destinations of the world, while indulging them onboard in the most luxurious accommodations, the finest culinary experiences, and the best hospitality delivered by our dedicated staff."

"We are excited to be collaborating with Celebrity on this dramatic step forward in premium cruise ship design," says Castaing. "This class of ships will be designed to deliver the destination to vacationers who want to experience all the world has to offer."

Royal Caribbean says the vessels also "represent a significant leap forward in environmentally friendly ship design, benefiting from new technologies to drive significant fuel efficiency and an ongoing process to ensure the extensive use of sustainable materials."

The company expects delivery of the first ship in the fall of 2018, with the second vessel delivered in the early part of 2020. The order is contingent upon the completion of customary conditions, including financing.  

Based upon current ship orders, projected Royal Caribbeam capital expenditures for full year 2014, 2015, 2016, 2017 and 2018 are $1.4 billion, $1.5 billion, $2.3 billion, $0.4 billion and $2.2 billion, respectively.

Capacity increases for 2014, 2015, 2016, 2017 and 2018 are expected to be 2.4%, 5.5%, 6.7%, 3.8% and 4.3%, respectively.  These figures do not include potential ship sales or additions that the company may elect to make in the future.

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