Royal Caribbean Cruises has sold the 1970-built, 23,000-ton, 1,050-passenger Song of Norway to Airtours for approximately $40 million. Royal Caribbean said it expected to realize a gain on the sale of the ship which will be recorded upon completion of the sale in the fourth quarter of 1996. Royal Caribbean will continue to operate the Song of Norway until mid-February 1997.
The Song of Norway is a sister ship to the Nordic Prince which Royal Caribbean sold to Airtours in 1994 for $55 million. Built in 1971, the Nordic Prince entered service for Airtours as the Carousel in spring of 1995.
By selling the Song of Norway, only the 714-passenger Sun Viking remains of Royal Caribbean's original 1970s-built fleet.
The sale will also reduce Royal Caribbean's passenger capacity by an estimated 40,000 passengers a year, which in turn will be boosted by four more new ships under construction for delivery this fall through 1998.
In the short term, Royal Caribbean may be conceeding some market share to the competition, but will instead have a more efficient fleet of newer and larger ships.
Royal Canbbean's ship transactions also mirror those of Princess Cruises which has streamlined its fleet.
Barring any further sales, by 1999, Royal Caribbean will have a fleet of 13 ships and 23,702 berths capable of carrying about 1.3 million passengers a year for a 19 percent share of the North American market.
Meanwhile, a new generation Royal Caribbean ship is also believed to be close to the contract stage.
In other news, Royal Caribbean has made a public offering of $175 million of its 7-1/4 percent Senior Notes due 2006 at 98.667 precent of the principal amount.
The net proceeds will be used by the company for general corporate purposes, including capital expenditures, the repayment and/or repurchase of certain indebtedness and working capital.