The AIDAPrima was delayed several times at MHI before its delivery in March 2016, more than a year behind schedule.
TOKYO, Oct 18 (Reuters) – Japan’s Mitsubishi Heavy Industries Ltd has abandoned its ambition to build European cruise liners and will stick to making smaller ferries and other medium-sized passenger ships after racking up losses on a venture to build two large vessels.
Mitsubishi Heavy Industries (MHI), Japan’s No.4 shipbuilder, booked 238 billion yen ($2.3 billion) in extraordinary losses in the three business years ended March 31 due to cost overruns and delays in the construction of two 100,000-ton class cruise liners for Europe’s Carnival Corp.
“We thought we could somehow manage it, but it showed us that we need a stringent decision making process and risk management, MHI Chief Executive Officer Shinichi Miyanaga said at a press briefing in Tokyo on Tuesday.
The construction of the vessels for Carnival was plagued by faulty engines, late design changes and onboard fires. That delayed delivery by more than a year and increased construction costs for the first of the two liners by almost four times to nearly $2 billion, MHI said in a report.
In the future, MHI’s passenger ship unit will build smaller vessels, such as 40,000-ton cruise ferries, that it can manage with its current workforce and domestic supply chain.
Currently, more than 90 percent of the world’s cruise liners are built in European shipyards.
MHI is more skilled at building merchant vessels, mainly liquefied natural gas carriers.
Earlier this month, a media report said MHI was downsizing its shipbuilding operations due to a slump in orders. Shipyards worldwide, including in Japan, South Korea and China, have been hurt by a slump in demand as a result of oversupply.
Global orders last year fell to 2,197 ships from 2,888 in 2014, according to the Shipbuilders Association of Japan. (Reporting by Tim Kelly; Editing by Chris Gallagher and Himani Sarkar)
CAIRO, March 2 (Reuters) – The Houthi Transport Ministry in Yemen said on Saturday there had been a “glitch” in undersea communication cables in the Red Sea as a result of actions...
by Captain John Konrad (gCaptain) In the current American labor landscape, the stark contrast between the assertive strides of transportation unions and the maritime sector’s unique labor challenges is striking....
By Mikhail Flores MANILA, Dec 2 (Reuters) – Evacuations were under way in the Philippines after a quake of at least magnitude 7.5 struck the southern region of Mindanao on Saturday night,...
December 2, 2023
Total Views: 2155
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.