European brand performance turned positive in the second quarter and should continue to improve, according to Carnival Corporation President and CEO Arnold Donald on the company’s second quarter earnings call.
And American brand seasonal (summer) programs in Europe were performing better, with improved pricing year-over-year, said David Bernstein, chief financial officer.
Aggressive Caribbean pricing moves by other cruise lines will see some adjustments coming in 2015, with Donald noting a slight reduction overall in the Caribbean for deployment, but a double-digit decrease in the third quarter which should drive pricing. 2015 capacity will be flat in Europe and Asia, said Donald, but up significantly in Asia and Australia.
Before the end of 2014, however, Costa Crociere will absorb the remnants of Iberocruceros, as was widely believed. Donald confirmed the Grand Celebration will become the Costa Celebration, while the Grand Holiday will leave the fleet – consistent with Carnival’s strategy to dispose or sell older, less-profitable ships.
“There are a number of ships in the fleet we plan to replace with newer, larger, more fuel-efficient vessels,” said Donald – perhaps leaving the door open for a much-rumored summer 2014 ship order.
Carnival has initiated a global review of revenue management strategies and expects to put a plan together soon, Donald added.
Fuel consumption in 2014 will be down 25 percent compared to 2007, while the company has issued a global request for proposal to airlines.