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Is NCL’s F3 ship hitting the fan?

Posted by Anita Dunham-Potter On September - 17 - 2008

There has been a lot of buzz in European shipyards the past two weeks about a dispute between Norwegian Cruise Line (NCL) and Aker Yards S.A. of France regarding NCL’s order for the first of two F3 vessels. The 150,000-ton, 4,200-berth ships are the biggest ever commissioned by NCL. The first F3 ship is scheduled for delivery in March 2010, the second ship is scheduled to arrive in summer 2010.

The keel for the first F3 ship was laid on April 24 and sources told cruise industry publication Seatrade that “the first F3 newbuild is not going ahead.” Seatrade spoke with Aker Yards corporate spokesman Torbjørn Andersen who stated that he would not comment on legal issues and the company is continuing discussions with all its clients, including NCL.

NCL issued the following statement to Expert Cruiser.com: “NCL Corporation Ltd., in response to reports that one of its subsidiaries may be involved in a contractual dispute with Aker Yards S.A. of France regarding a shipbuilding contract, will not comment on commercial or legal disputes.”

So, what’s going on?

NCL is jointly owned by Star Cruises and private equity firm Apollo Management. Apollo infused $1 billion in cash to NCL in January, so, there should be plenty of money for the F3 ship, right? Maybe not.

For the past two years NCL has been in the red. Despite significant growth in revenues the company lost $227 million in 2007 and $130.9 million in 2006. The biggest financial drain has been taking delivery of new ships, which NCL has done each year for the past seven years. However, the F3 project is turning out to be the ultimate expense.

The F3 ships were initially ordered for NCL’s parent company, Star Cruises each at a cost of $735 million Euros (close to $1 billion) per ship, but the costs have reportedly increased significantly. NCL opted to change the original vessel plans and make it an all-balcony ship with “New Wave” staterooms . Additionally, NCL announced with much fanfare in Las Vegas that it would introduce a radical nightclub scene on the F3 ships complete with pools and ice bars.

Clearly, these options are very costly. How costly no one is saying but sources say that increasing costs are the crux of the dispute between NCL and Aker Yards.

What will happen to the F3 ships if NCL does not take delivery? In today’s issue of Cruise Week it was noted that Aker Yards also builds ships for Royal Caribbean and MSC and both lines seem to be “likely
contenders to take over the F3 project.”

Stay tuned for more information.

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One Response to “Is NCL’s F3 ship hitting the fan?”

  1. Error Codes says:

    Better pest control would be great. The last NCL cruise I went on my wife and I got infested with bed bugs, which of course didn’t start biting until the night we got home. Took an exterminator 3 times to finally get rid of them from our house.

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