Costa Atlantica Makes It's Maiden Call to Singapore

Carnival chairman Micky Arison described the future of the cruise company’s Costa brand as “very bright”, despite the group reporting a 30 per cent slump in third-quarter net income.

A week after the 114,500-tonne Costa Concordia was hauled upright off Tuscany, Mr Arison said Costa was “a very, very powerful brand” that had suffered a terrible setback from which it would take up to three years to recover.

The ship’s captain, Francesco Schettino, is on trial on charges including manslaughter after the ship capsized in January 2012, killing 32 people.

Mr Arison said: “If you look at a lot of great brands that had setbacks – they recover. If they’re managed well and understand their customer and get great value, over time they recover.”

Speaking at the announcement in London of a fresh addition to Carnival’s P&O brand, Mr Arison said that after a difficult year in which Costa had “lost quite a bit of money”, public acceptance of the brand had “recovered nicely”, and Costa was again profitable.

“Within a year of the event, it turned around. It hasn’t come 100 per cent back, you wouldn’t expect it to come 100 per cent back in a year,” Mr Arison said.

The economic malaise in southern Europe was affecting the pace of Costa’s recovery, he added. “It will take time. In two or three years’ time, Costa will be as strong as ever.”

Arnold Donald, who in June took over from Mr Arison as Carnival’s chief executive, said: “We are having to discount less for Costa than we did a year ago.”

On top of the Costa Concordia tragedy, Carnival had to deal with the PR fiasco of an engine room fire on Carnival Triumph in February which left 3,000 passengers stranded in worsening sanitary conditions, followed a month later by the cancellation of a cruise because of technical problems.

The group, which has 10m customers a year and a 45 per cent share of the cruise market, said bookings for the remainder of 2013 and the first half of 2014 were behind the previous year.

It said net revenue yields – measuring the revenue earned for each berth – for the full year would be down about 3 per cent compared with 2012. Third-quarter net income was $934m, compared to $1.3bn in the same period last year, meaning a fall from $1.71 in diluted earnings per share to $1.20.

Shares in London were down more than 5 per cent.

The group is to spend £500m to build Britannia, a 141,000-tonne cruise ship to add to the P&O fleet. It will enter service in March 2015.

Britannia will carry 3,600 passengers and increase the capacity of P&O by 24 per cent. The ship, which will be built in Trieste, has a newly designed hull intended to cut fuel consumption by 20 per cent.

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