Costa Crociere: Raising the Bar

At Costa Crociere, CEO and Chairman Pier Luigi Foschi’s management philosophy has raised the bar for the industry. Earlier this year, Costa announced Green Ship certification for its entire 11-ship fleet by RINA, in addition to receiving Best 4 certification last year – both are voluntary, Foschi pointed out.

 “We want to have the best management we possibly can,” he said, “and we want everybody in the company – ashore and on the ships – to understand our philosophy.” Foschi thus took the steps to formalize and document his intentions, which he added, also allows for better monitoring both internally and externally.

Foschi expects that European growth will track theNorth American model where eventually older ships disappeared.

Strong management creates a more cohesive organization, said Foschi, where everybody is pulling in the same direction and to the same high standards.

Best 4 is an integrated system of corporate compliance with the highest international standards for social accountability, environmental protection, and occupational health and safety and quality.

Green Star has been awarded to both the new and the older Costa ships, and Foschi explained that if older vessels could not comply structurally with the requirements, remedies (such as the establishment of onboard emergency teams to handle possible spills) were accepted by RINA and entitled all the ships to the notation.

Growing Fleet

Costa’s capacity is up 17 percent this year compared to last year, following the introduction of new ships in 2003 and 2004 and with its newest ship, the Costa Magica, which was introduced in October of last year, sailing for the full year.

In addition, Costa has two more new ships under construction at Fincantieri’s Sestri Ponente Genoa yard, the 112,000-ton, 3,000-passenger Costa Concordia, slated to enter service in 2006, and a yet-unnamed sister ship for 2007.

Costa is also expected to receive one of two ships ordered by Carnival Corporation at Fincantieri, which have not yet been assigned to a brand. They are scheduled for delivery in 2008.

 Despite the strong capacity increase year-over-year and despite weakened economies in Europe, Foschi said that bookings were ahead of last year, if only marginally, while pricing tends to be flat. He expects 2005 to be another good year for the company.

Costa reported revenues of 1.2 billion euros, or approximately $1.4 billion for 2004; with operating income of approximately $273.8 million, and carried 729,528 passengers. Compared to 2003, revenues were up 35 percent; operating income was up 90 percent; and the passenger count was up 31 percent. – Oivind Mathisen

Excerpt from the Cruise Industry News Quarterly Magazine: Summer 2005

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