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MSC Expansion, Two New Ships Ordered

MSC Cruises has ordered two 135,500-ton, 3,300-passenger ships from STX France for deliveries in spring 2008 and spring 2009. The ships' maximum passenger capacity will be 3,887 passengers and 1,300 crew members. The contract is valued at more than $1.2 billion.

The two ships will bring MSC's cruise fleet to 11 ships and 20,880 berths by 2009, with an estimated annual passenger capacity of775,500, making MSC the sixth largest cruise brand in terms of passenger capacity, after Carnival Cruise Lines, · Royal Caribbean International, Princess Cruises, Norwegian Cruise Line and Costa Crociere.

"Business is pretty good," said Rick Sasso, president and CEO of MSC Cruises in the U.S. "Bookings are in line with expectations. They are better than last year, but we have the same inventory," he added.

Sasso is what he called cautiously optimistic that more business will come his way with MSC's Eastern Caribbean itineraries in the wake of the hurricane damage in Cozumel. Pricing for the 2005/2006 winter season in the Caribbean and for next summer are also above last year, but then again, they should be, according to Sasso, who said MSC used lower prices to drive business last year. '"We were the new guy on the block and it took some time to stimulate business," he said.

MSC's seven-day itineraries to the Eastern Caribbean aboard the MSC Opera include calls at St.Maarten, San Juan, La Romana and the line's own out-island, Cayo Levantado.

In addition, the MSC Lirica sails mostly 11-day cruises, including calls to Colombia, Honduras, and Costa Rica.

On the seven-day cruises, 90 percent of the passengers will be American and 70 percent on the longer cruises, according to Sasso.

"We offer Italian-style cruising," Sasso said. "We have Italian officers, Italian chefs, and Italian staff. And every night, we feature Italian specialties in the dining room.

"The market is growing; we are looking to source more American passengers for our programs in the Mediterranean too, where we are adding some tremendous itineraries - roundtrip cruises from Barcelona, Rome and Venice.

"As more people get to know us, our brand is growing in popularity."

In an effort to build awareness, MSC has engaged Sophia Loren, who will act as the cruise line's spokesperson, participating in advertising and other promotional efforts. The Italian movie star christened the MSC Opera in June 2004.

The objective is to continue to grow the American contingent on Mediterranean cruises up to as much as 25 percent of the capacity, according to Sasso.

For the Caribbean 2007/2007 season, Sasso said MSC will do more - with more itineraries, more destinations, more homeports.

And by 2006 or 2007, he expects to have a ship year-round in North American waters.

''I like to think of us as Home Lines and Sitmar used be," Sasso explained. ''I would like for us to be the rebirth of this kind of style and service," he said.

For onboard spending, MSC claims to have a less aggressive approach than other mainstream cruise lines. "We are not over-charging for anything," Sasso said. "We are not intrusive, and we do what we do tastefully and with style. It is more about providing service and entertainment.

"We are not going to shove a $10 souvenir drink in peoples' faces as soon as they come onboard."

Since Sasso joined MSC about 18 months ago, he said his biggest effort has been to build relationships with travel agents. "'We have given MSC penetration into five times more agents than used to sell us," he said.

Nearly complete is a new system that will allow travel agents to book without making phone calls. "But cruise passenger cannot," Sasso pointed out. '"We are protecting the agents." Still, he said he needs to build more awareness. "We are still underpriced for the value of what we offer," Sasso said.

MSC's focus is on deployment in Europe, North America and South America. But as Europe grows, Sasso said it was not unlikely that MSC could also deploy a ship for the European market in the Caribbean where passengers would not need visas.

In addition to the recently announced post-Panamax ships, MSC is also building two Panamax ships at the French yard - Musica and Orchestra - for deliveries in 2006 and 2007. "We will soon have 11 ships and have our sights set on growing further," Sasso added.

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