Royal Caribbean Group orders fourth giant Icon Class ship

Photo: Meyer Turku

The days of the post-pandemic cruise ship ordering pause are rapidly fading into the past. Today, Royal Caribbean Group (NYSE: RCL) reported that it has signed an agreement with Finnish shipbuilder Meyer Turku to order a fourth Icon Class ship for delivery to its Royal Caribbean International brand in 2027. The agreement also includes options to build a fifth and sixth Icon Class ship.

“Building on the incredible momentum and market response to the launch of Icon of the Seas and the excitement for its sister ship, Star of the Seas, coming in 2025, we’re thrilled to join with Meyer Turku once again to expand our roster of Icon Class ships and continue our future growth plans,” said Jason Liberty, president and CEO, Royal Caribbean Group. “Since its debut, Icon has changed the game in vacation experiences and exceeded our expectations in both guest satisfaction and financial performance.”

“This is great news for Finland. Royal Caribbean Group’s long-term partnership will continue to have a positive impact on our employment and economy,” said Petteri Orpo, Prime Minister of Finland. “Their commitment and investment in Finland speaks volumes about the strength of our maritime cluster and our world class shipyards.”

The first ship in the Icon Class and holder of the “world’s largest cruise ship” title, the 7,600 guest Icon of the Seas, is taller than the Eiffel Tower, with a total of 20 decks, and is 1,198-foot long. In operation since January, it introduced what Royal Caribbean describes as “an all-encompassing lineup of experiences that combines the best of every vacation – from the beach retreat to the resort escape and the theme park adventure.”

With this latest order, Royal Caribbean Group says that it is continuing “to drive its moderate capacity growth to help guests turn a vacation of a lifetime into a lifetime of vacations.” The next ships in the company’s line-up will be Star of the Seas (launching in 2025) and the yet-to-be-named third Icon Class ship (launching in 2026).

“This order is an important milestone for the future of shipbuilding in the maritime network in Finland,” added Tim Meyer, CEO of Meyer Turku. “With Icon of the Seas, our team, consisting of the shipyard and partners, have built an extraordinary ship in respect of naval architecture, energy efficiency and customer experience. This is yet another recognition of the professionalism of our personnel and of our leadership in the maritime industry’s innovation and green transition. The options underline the strong outlook of our order book.”

This latest order also expands upon Royal Caribbean Group’s longstanding relationship with Meyer Turku. With this order, Meyer Turku will have built 21 ships for Royal Caribbean Group over 28 years.

Royal Caribbean Group’s newbuild pipeline continues to grow, with seven new ships on order, and two shipyard options. This year, the company welcomed four new ships, including Royal Caribbean International’s Icon of the Seas and Utopia of the Seas, Silversea’s Silver Ray and TUI Cruises’ Mein Schiff 7. This latest order also comes on the heels of the company’s announcement for a seventh Oasis Class ship, set to debut for Royal Caribbean International in 2028.

“Icon of the Seas is unlike anything the world has seen before, and we’re just getting started,” added Michael Bayley, president and CEO, Royal Caribbean International. “We are leading the vacation industry in developing new experiences for our guests to create lifelong memories, and we continue dreaming and evolving to deliver more ways to chill and thrill.”

This agreement is contingent upon customary conditions, including financing.

MEYER WERFT RESTRUCTURES

While the order for the next Icon Class is being placed with Meyer Group’s Finnish yard, it must be welcome news for the group as a whole, and comes within days of an August 22 visit to Meyer Werft in Papenburg, Germany, by Chancellor Olaf Scholz and Lower Saxony’s Minister President Stephan Weil who emphasized their firm commitment to supporting the company as part of a restructuring and future concept.

The CEO of the company, Bernd Eikens, and the restructuring specialist appointed by the company, Ralf Schmitz, said in a joint statement that “the way has now been paved for the start of restructuring and securing the future of the shipyard.”

The two managers saw the announcement by Federal Chancellor Scholz and Minister President Weil as a “key contribution by politicians to give the shipyard and its many thousands of employees and their families as well as business partners secure prospects for the future.”

“We are also grateful that such a great partnership of responsibility between the shipyard, the family, politicians, banks and employees has succeeded in ensuring the future viability of the company. We now have the opportunity to put the crisis behind us, make the shipyard competitive again and focus on profitable growth,” said Eikens and Schmitz in their statement.

The solution is described as also in line with the Meyer family’s wish not only to remain emotionally and traditionally attached to the company, but also “to continue to influence the development of the company as co-shareholders and with a seat and vote on the newly formed Supervisory Board.”.

“The solution that has now been found is not easy for the family, but we have always said that the interests of the company take precedence over those of the family,” said Bernard Meyer. “We see a great opportunity to get the company back on track for the future – this is also shown by the pleasing development of the order book to 11 billion euros in recent months. The willingness of the federal and state governments as well as our associated commercial banks to support us in the form that has now been agreed also shows that we have achieved a special position in shipbuilding with our company over decades. We know our business and see the opportunity for long-term and successful further development at our sites. The agreement on a buy-back right for the family gives us the opportunity to become a family business again. As the second largest company after the public sector and through our involvement in the Supervisory Board, we will constructively support the further development of the shipyard.”