Asian Cruise-Ship Builders ‘Threat’ to European Yards

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June 16, 2014

November 2013: The first block of the new cruise ship Anthem of the Seas for Royal Caribbean Cruises is put in place in MEYER WERFT’s building dock II. Image courtesy Meyer Werft/Royal Caribbean

By Nicholas Brautlecht

June 16 (Bloomberg) — Europe’s almost 50-year long dominance in cruise shipbuilding may be undermined in coming years as yards in Japan and China grab orders amid growing demand, according to an industry study.

Japanese yards obtained contracts to build two of 27 cruise liners scheduled for delivery through 2017 for a combined 12.7 billion euros ($17.2 billion), according to the report commissioned by the European branch of Cruise Lines International Association. Two more prospective orders have been reported for yards in China, the group said.

“Despite the increase in the total order book during 2013 the contracts placed in Japan and potentially in China represent a threat to Europe’s continued preeminence in cruise shipbuilding,” researchers said in the report released today. “The emergence of competition from China, as well as Japan, remains a possibility, as we move towards the second half of the present decade.”

Cruise-ship passenger numbers rose 77 percent over the last decade to 21.3 million by the end of 2013, exceeding the 57 percent expansion in overall tourism mainly comprised of land- based holidaymakers, according to the study.

European shipyards, which have lost almost all their merchant vessel-building business, including orders for large container ships, to lower-cost peers in Asia such as South Korea and China, have so far continued to dominate cruise-ship construction.

German and Italian yards such as Meyer Werft GmbH and Fincantieri SpA share 72 percent of the European order book through 2017, including 24 cruise liners with space for 76,161 passengers, the study found. French and Finish shipbuilders hold the remaining share of European contracts.

The two vessels to be constructed by Mitsubishi Heavy Industries Ltd. in Japan and scheduled for delivery in 2015 and 2016 were ordered by Carnival Corp.’s German unit Aida Cruises, according to the company’s website.

Copyright 2014 Bloomberg.

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