Shipbuilding: Chantiers de l'Atlantique: Rebuilding Market Share

Jules Verne - the French shipyard's futuristic conceptIn order to meet demand, the cruise lines need to introduce 10 to 12 new ships annually in the years to come, said Patrick Boissier, CEO and chairman of Chantiers de l’Atlantique. “The cruise industry is a wonderful business, it continues to grow, and it still has huge potential,” Boissier added.

The French builder presently has two Panamax ships under construction for MSC Cruises with a larger next-generation on the drawing board for the Italian cruise line. The yard recently delivered two 60,000-ton ships to MSC, as well as ships to Princess Cruises and Crystal Cruises and the Queen Mary 2 to Cunard Line.

"The Goal is to continue to build cruise ships profitably, while lowering costs as much as 15 percent for new orders over the next two to three years." - Patrick Boissier, CEO and chairman, Chantiers de l'Atlantique. 

Meanwhile, the orderbook ebbs and flows with the industry cycles. The French yard, which is one of the leading builders of cruise ships, had a full orderbook in 2000 and 2001. But most of the orders were placed in the time period 1998 to 2000. With restructuring and consolidation among the cruise lines, a downturn in the U.S. economy as a consequence of 9/11, as well as the declining value of the dollar versus the euro, fewer orders were placed in 2002 and 2003, according to Boissier, who added that this impacted all the yards. When the industry started to pick up in 2004, Chantiers benefited less than competing yards, which are building sister ships, Boissier said, noting that  Carnival Corporation, Royal Caribbean Cruises and the Star Group’s new ship orders are basically continuations of previous designs, although sometimes stretched and enlarged. The only prototype is the new AIDA ships, he said.

Chantiers de l’Atlantique also had the misfortune of building for owners that left the industry, Boissier explained, such as Renaissance Cruises and Festival Cruises, and for owners that do not build series of ships, such as Cunard Line, Radisson Seven Seas Cruises and Crystal Cruises. Hopefully for Chantiers de l’Atlantique, MSC may be the exception.

Even so the French builder is not the only yard to have witnessed a shrinking orderbook. Aker Finnyards and Meyer Werft have also seen orders slumping, while Fincantieri benefited from its relationship with Carnival Corporation.

Looking forward, Boissier is convinced the orders will pick up: “Our main business remains cruise. We are dedicated to the industry,” he said. – Oivind Mathisen

Excerpt from the Cruise Industry News Quarterly Magazine: Summer 2005

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