Hawaii Pricing, Capacity Take the Blame for NCL Corp’s First-Quarter Losses

NCL Corp. blamed lower ticket prices on inter-island Hawaii cruises for most of the cruise company’s $60.8 million loss during the first quarter of this year.

The loss came on revenues of $490.8 million, compared to a loss of $28.8 million on revenues of $426.6 million for the first quarter of 2006.

“Despite the challenging operating environment and the impact on pricing of sharply increased capacity in Hawaii, we remain committed to the Hawaiian market,” said NCL CEO Colin Veitch in an earnings release. “The various measures announced since the fourth quarter of last year will collectively result in a significant improvement by the same time next year.”

Mr. Veitch said Hawaii would continue to face challenges for the majority of the year. He added that taking the Pride of Hawaii out of the Hawaii and redeploying it to Europe would “allow the company to further capitalize on the growing demand for European cruises.”

Revenues for the first quarter of 2007 increased 15.1 percent over the same period of last year on a 23.4 percent increase in capacity days, which were partially offset by a 5.3 percent decrease in net yields. Occupancy for the quarter was down from 105.5 percent in the same period of 2006 to 103.9 percent.

On the bright side, NCL said “significant progress in cost control was achieved by the entire fleet, both U.S. and international.” Net cruise costs per capacity day for the first quarter of 2007 decreased 1.9 percent compared to the first quarter of 2006.

NCL also said that demand for Alaska, “though still relatively strong, has begun to show some signs of slowing.” Pricing for Europe is a strong point, and next year, NCL will deploy three ships to the Continent, including the reflagged Pride of Hawaii, which will sail as the Norwegian Jade.