Weakening Dollar and Hawaii Challenges Blamed For NCL Losses

NCL Corp. reported 2006 fourth quarter losses of $116 million on Monday, which added to a full-year net loss of $130.9 million. NCL made a profit of $16.2 million in 2005. Much of the blame for the negative performance was placed on high interest expenses, a weakening U.S. dollar and challenges facing the Hawaii cruise program, specifically "severe downward pricing," noted by NCL's president and CEO Colin Veitch. He also cited competition from low-cost, foreign-flag ships cutting into NCL's higher-cost, U.S.-flagged operations. The future doesn't look all that much brighter. "We face the challenge of an unprecedented 1.6 million capacity days of low-cost foreign-flag competition in the Hawaii trade during 2007 and published signs of further increases in 2008," said Veitch. In light of this, the company said it would continue to order new ships and push ahead with its Freestyle Cruising approach. Some good news: NCL has seen strong wave season bookings, which it chalks up to its new marketing campaign. The stronger wave season is prompting NCL to increase prices on many itineraries. The company also said the Caribbean is showing modest improvement and European summer programs are strong.

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