Royal Caribbean Cruises exercised its option earlier this month to build a second Ultra Voyager - 160,000 tons, 3,600 passengers - at Kvaerner Masa-Yards, which is now known as Aker Finny Yards. Scheduled for delivery in the spring of 2007, the ship will be operated by the Royal Caribbean International brand.

Royal Caribbean said that "despite adverse foreign exchange rates, building a sister ship results in beneficial cost efficiencies and an all-in dollar cost that is essentially the same as for the first Ultra Voyager."

Royal Caribbean has previously estimated the cost of the Ultra Voyager to be just over $200,000 per berth, which translates into a contract value of more than $720 million.

The yard said in a statement that the contract value was between 570 and 580 million euros, which correspond to approximately $690 to $700 million.

When the Ultra Voyager was first announced on June 16, 2003, the dollar-euro exchange rate was $1.18, and Royal Caribbean said that a contract would be entered into, provided certain conditions, such as the dollar-euro exchange rate, moved to a more favorable position. When the contract was announced on Sept. 19, 2003, the dollar-euro rate had dropped to $1.13.

When Royal Caribbean announced on Sept. 8, 2004 that it had exercised the option for a second Ultra Voyager, however, the exchange rate was $1.21 - theoretically making the second ship seven percent - or $50 million - more expensive than the first one. Thus, it would seem that the yard came down on its price to secure the order. The original option was extended from Aug. 31, 2004 to Sept. 30, 2004.