| QUEEN VICTORIA |
| CUNARD |
BUILDING UPON
TRADITION
(CONTINUED)
TRADITION
(CONTINUED)
For two years, Cunard operated under a cloud of great uncertainty while a buyer was sought.
Peninsular and Orient Lines ("P&O"), another British line with a long pedigree, was viewed as
the most buyer but it had no interest. Then, in 1998, Carnival Corporation purchased a partial
interest and the next year became the sole owner for $500 million.
Although the staid, old, British luxury line and the cruise ship conglomerate that had grown in just
a few years from an upstart, mass-market American cruise line, appeared to be strange
bedfellows, the acquisition made sense for two reasons. First, Carnival's philosophy is to
operate its acquisitions as separate brands designed to appeal to different market segments and
thus it was not buying Cunard to expand its original mass market cruise operation. Rather,
largely as a result of the success of the movie Titanic, the public had a renewed interest in ocean
liners and Carnival saw a relatively untapped market there. Cunard would give it the most
famous ocean liner still in service as well as a 150-year ocean liner heritage. Second, the major
cruise lines were beginning to realize that Europe was relatively undeveloped as a cruise ship
market. P&O along with its American subsidiary, Princess Cruises, was a major player in the
cruise industry and since it had a strong brand image in Europe, particularly in Britain, it had a
headstart over Carnival. The Cunard brand, widely-recognized in Europe, would help Carnival
compete in that market.
Upon acquiring Cunard, Carnival set about trying to make sense out of the Cunard fleet. QE2
would remain the centerpiece around which to rebuild the fleet. As an interim measure until some
new ships could be built, VISTAFJORD would be restyled like a British liner. She was
repainted to look like QE2, commanded by officers from QE2 and given the traditional Cunard
name CARONIA. The Sea Goddess yachts were transferred to Carnival's Seabourn subsidiary,
which specialized in small-ship luxury cruising. The ROYAL VIKING SUN was transferred first
to Seabourn, where she was somewhat out of place, and then after a refit to Carnival's Holland
America Line subsidiary where she is now the PRINSENDAM. Carnival disposed of the
remaining assets and marketing arrangements.
As a result of Carnival's makeover of the company, Cunard emerged with a clear identity. This
identity was confirmed when Carnival built for Cunard the first true ocean liner constructed in 40
years, the giant QUEEN MARY 2. When the relatively small and aging CARONIA exited the
fleet, Cunard was able to assert it owned the most famous passenger ships in the world on which
it provided sophisticated voyages in the tradition of the great ocean liners of the past.
Developing a solution
Still, Cunard's problems were not over yet. As noted earlier, a two ship fleet is not viable in the
long run. Indeed, considering QE2’s age, Cunard faced the prospect of becoming a one-ship
line in the not too distant future. Furthermore, even inside a conglomerate, shareholders want to
see a company's business grow. When Carnival acquired Cunard, the avenue for growth was
relatively clear. In addition to increasing capacity on the transatlantic service with a new ocean
liner, Cunard would provide upscale cruises in Europe in competition with P&O/Princess. The
latter part of the strategy could be done by building a series of cruise ships similar to the ones
used by Holland America and other Carnival subsidiaries and running them in the Cunard
tradition.
But, in November 2001, Royal Caribbean announced that it was going to merge with
P&O/Princess. Such a combination of the number two and number three corporations in the
cruise industry would topple Carnival from its place on top of the industry. Accordingly, Carnival
made a successful preemptive offer for P&O/Princess and it came under the Carnival umbrella in
2003.
With the acquisition of P&O/Princess, there was no longer a reason for Carnival to build Cunard
into a competitor for P&O/Princess. Indeed, the question now became how to expand Cunard
in a way that it would be distinct from P&O/Princess.
Taking an off-the-shelf cruise ship design and painting the ship in Cunard colors would not be an
answer. One of the things that distinguishes Cunard from other passenger ship lines is that its two
ships are special, unique ships. They are ocean liners rather than cruise ships. An off-the-shelf
cruise ship would thus dilute the brand. Perhaps most importantly, it would make Cunard too
similar to its sister company P&O. Accordingly, Carnival announced that a cruise ship that
Carnival had ordered for Cunard before the merger would be going to P&O. (That ship
subsequently became the ARCADIA).
Building another giant ocean liner also did not make sense. The cost of building an ocean liner
such as QM2 is approximately 25 percent more than building a similar size modern cruise ship
such as Royal Caribbean's FREEDOM OF THE SEAS. At the same time, there is more risk
associated with building a unique ship; you do not know beforehand how well she will operate or
whether passengers will like the ship. Finally, Cunard did not see the need for another ship to do
what QM2 does. "QUEEN MARY 2 is an ideal ship for doing the transatlantic runs, the size, the
way she works, is perfect. We felt we wanted to complement her by having another vessel that
is Panamax, that can go through the [Panama] canal, and that can go into some smaller ports.
For us it makes sense to have a larger [ship] and a couple of smaller and not to go any bigger.
That was our rationale," explained Ms. Marlow.
Cunard's solution to this dilemma was to take an existing cruise ship design and attempt to make
it into a special ship by (1) modifying her technologically and (2) imprinting her with the Cunard
heritage and style. The new ship will be called QUEEN VICTORIA and will cost £ 300 million.
Not Just A Cruise Ship
In designing QUEEN VICTORIA, Cunard began with the design for the Vista-class cruise
ships. This is a very popular cruise ship design that has been used for ships in several Carnival
subsidiaries including the ARCADIA discussed earlier. Holland America's NOORDAM is the
latest example of a Vista-class ship. (See The Log, Spring 2006 at 9).
Cunard then began to modify the design. First, the ship will be longer than the existing Vista-
class cruise ships giving her a length of 964.5 feet as opposed to NOORDAM's 935 feet and a
gross tonnage of 90,000 g.r.t. in contrast to NOORDAM's 82,318. This increased size will
make the ship more comparable in size to the giant ships, past and present, which people
associate with Cunard. In fact, QUEEN VICTORIA will be the second largest Cunarder ever
built, which means that she will be bigger than QUEEN MARY, QUEEN ELIZABETH and
QE2. Only QM2 at 151,000 g.r.t. will be larger.
The increased size will not be used primarily for carrying more passengers - - there is less than a
100 passenger difference in the new ship's capacity versus NOORDAM's despite the difference
in size (2,014 vs. 1,918). Rather, the additional area will be used for more spacious and grander
public rooms. "Part of the luxury of the Cunard experience is space. The space ratio is all part of
luxury."
In addition, QUEEN VICTORIA's longer length should give her better seakeeping qualities than
a cruise ship. Because she will have the same beam as NOORDAM, her longer length will give
her a sleeker, more elongated shape that should cut through the water more efficiently.
Inasmuch as Cunard envisions this ship as being able to do a wide variety of cruises including
those that involve crossing rough waters, the design for the hull of the ship was analyzed to ensure
that the steel structure could meet the rigors of seas such as the North Atlantic. Critical areas
were identified and strengthening has been added to the steel and bulkheads to meet the
predicted stress levels. In addition, the thickness of the steel in the bow was increased to meet
the pounding experienced by the fore end of a ship in extreme seas.
Unlike NOORDAM, QUEEN VICTORIA will be powered exclusively by six diesel engines.
NOORDAM and the other Holland America Vista-class ships have a gas turbine engine as a
secondary power plant to their five diesel engines. However, gas turbines are very expensive to
operate and Cunard decided that they were unnecessary for this ship. Although QUEEN
VICTORIA will be larger, she will be somewhat more powerful and slightly faster than
NOORDAM.
There will also be some largely cosmetic differences in the appearance of the ship. QUEEN
VICTORIA will have a single funnel as opposed to NOORDAM's two small funnels. The new
ship will not have the mid-ship exterior glass elevators that NOORDAM has but will have a
dining area that will be slightly cantilevered and curve out over each side of the ship from the top
deck.
Peninsular and Orient Lines ("P&O"), another British line with a long pedigree, was viewed as
the most buyer but it had no interest. Then, in 1998, Carnival Corporation purchased a partial
interest and the next year became the sole owner for $500 million.
Although the staid, old, British luxury line and the cruise ship conglomerate that had grown in just
a few years from an upstart, mass-market American cruise line, appeared to be strange
bedfellows, the acquisition made sense for two reasons. First, Carnival's philosophy is to
operate its acquisitions as separate brands designed to appeal to different market segments and
thus it was not buying Cunard to expand its original mass market cruise operation. Rather,
largely as a result of the success of the movie Titanic, the public had a renewed interest in ocean
liners and Carnival saw a relatively untapped market there. Cunard would give it the most
famous ocean liner still in service as well as a 150-year ocean liner heritage. Second, the major
cruise lines were beginning to realize that Europe was relatively undeveloped as a cruise ship
market. P&O along with its American subsidiary, Princess Cruises, was a major player in the
cruise industry and since it had a strong brand image in Europe, particularly in Britain, it had a
headstart over Carnival. The Cunard brand, widely-recognized in Europe, would help Carnival
compete in that market.
Upon acquiring Cunard, Carnival set about trying to make sense out of the Cunard fleet. QE2
would remain the centerpiece around which to rebuild the fleet. As an interim measure until some
new ships could be built, VISTAFJORD would be restyled like a British liner. She was
repainted to look like QE2, commanded by officers from QE2 and given the traditional Cunard
name CARONIA. The Sea Goddess yachts were transferred to Carnival's Seabourn subsidiary,
which specialized in small-ship luxury cruising. The ROYAL VIKING SUN was transferred first
to Seabourn, where she was somewhat out of place, and then after a refit to Carnival's Holland
America Line subsidiary where she is now the PRINSENDAM. Carnival disposed of the
remaining assets and marketing arrangements.
As a result of Carnival's makeover of the company, Cunard emerged with a clear identity. This
identity was confirmed when Carnival built for Cunard the first true ocean liner constructed in 40
years, the giant QUEEN MARY 2. When the relatively small and aging CARONIA exited the
fleet, Cunard was able to assert it owned the most famous passenger ships in the world on which
it provided sophisticated voyages in the tradition of the great ocean liners of the past.
Developing a solution
Still, Cunard's problems were not over yet. As noted earlier, a two ship fleet is not viable in the
long run. Indeed, considering QE2’s age, Cunard faced the prospect of becoming a one-ship
line in the not too distant future. Furthermore, even inside a conglomerate, shareholders want to
see a company's business grow. When Carnival acquired Cunard, the avenue for growth was
relatively clear. In addition to increasing capacity on the transatlantic service with a new ocean
liner, Cunard would provide upscale cruises in Europe in competition with P&O/Princess. The
latter part of the strategy could be done by building a series of cruise ships similar to the ones
used by Holland America and other Carnival subsidiaries and running them in the Cunard
tradition.
But, in November 2001, Royal Caribbean announced that it was going to merge with
P&O/Princess. Such a combination of the number two and number three corporations in the
cruise industry would topple Carnival from its place on top of the industry. Accordingly, Carnival
made a successful preemptive offer for P&O/Princess and it came under the Carnival umbrella in
2003.
With the acquisition of P&O/Princess, there was no longer a reason for Carnival to build Cunard
into a competitor for P&O/Princess. Indeed, the question now became how to expand Cunard
in a way that it would be distinct from P&O/Princess.
Taking an off-the-shelf cruise ship design and painting the ship in Cunard colors would not be an
answer. One of the things that distinguishes Cunard from other passenger ship lines is that its two
ships are special, unique ships. They are ocean liners rather than cruise ships. An off-the-shelf
cruise ship would thus dilute the brand. Perhaps most importantly, it would make Cunard too
similar to its sister company P&O. Accordingly, Carnival announced that a cruise ship that
Carnival had ordered for Cunard before the merger would be going to P&O. (That ship
subsequently became the ARCADIA).
Building another giant ocean liner also did not make sense. The cost of building an ocean liner
such as QM2 is approximately 25 percent more than building a similar size modern cruise ship
such as Royal Caribbean's FREEDOM OF THE SEAS. At the same time, there is more risk
associated with building a unique ship; you do not know beforehand how well she will operate or
whether passengers will like the ship. Finally, Cunard did not see the need for another ship to do
what QM2 does. "QUEEN MARY 2 is an ideal ship for doing the transatlantic runs, the size, the
way she works, is perfect. We felt we wanted to complement her by having another vessel that
is Panamax, that can go through the [Panama] canal, and that can go into some smaller ports.
For us it makes sense to have a larger [ship] and a couple of smaller and not to go any bigger.
That was our rationale," explained Ms. Marlow.
Cunard's solution to this dilemma was to take an existing cruise ship design and attempt to make
it into a special ship by (1) modifying her technologically and (2) imprinting her with the Cunard
heritage and style. The new ship will be called QUEEN VICTORIA and will cost £ 300 million.
Not Just A Cruise Ship
In designing QUEEN VICTORIA, Cunard began with the design for the Vista-class cruise
ships. This is a very popular cruise ship design that has been used for ships in several Carnival
subsidiaries including the ARCADIA discussed earlier. Holland America's NOORDAM is the
latest example of a Vista-class ship. (See The Log, Spring 2006 at 9).
Cunard then began to modify the design. First, the ship will be longer than the existing Vista-
class cruise ships giving her a length of 964.5 feet as opposed to NOORDAM's 935 feet and a
gross tonnage of 90,000 g.r.t. in contrast to NOORDAM's 82,318. This increased size will
make the ship more comparable in size to the giant ships, past and present, which people
associate with Cunard. In fact, QUEEN VICTORIA will be the second largest Cunarder ever
built, which means that she will be bigger than QUEEN MARY, QUEEN ELIZABETH and
QE2. Only QM2 at 151,000 g.r.t. will be larger.
The increased size will not be used primarily for carrying more passengers - - there is less than a
100 passenger difference in the new ship's capacity versus NOORDAM's despite the difference
in size (2,014 vs. 1,918). Rather, the additional area will be used for more spacious and grander
public rooms. "Part of the luxury of the Cunard experience is space. The space ratio is all part of
luxury."
In addition, QUEEN VICTORIA's longer length should give her better seakeeping qualities than
a cruise ship. Because she will have the same beam as NOORDAM, her longer length will give
her a sleeker, more elongated shape that should cut through the water more efficiently.
Inasmuch as Cunard envisions this ship as being able to do a wide variety of cruises including
those that involve crossing rough waters, the design for the hull of the ship was analyzed to ensure
that the steel structure could meet the rigors of seas such as the North Atlantic. Critical areas
were identified and strengthening has been added to the steel and bulkheads to meet the
predicted stress levels. In addition, the thickness of the steel in the bow was increased to meet
the pounding experienced by the fore end of a ship in extreme seas.
Unlike NOORDAM, QUEEN VICTORIA will be powered exclusively by six diesel engines.
NOORDAM and the other Holland America Vista-class ships have a gas turbine engine as a
secondary power plant to their five diesel engines. However, gas turbines are very expensive to
operate and Cunard decided that they were unnecessary for this ship. Although QUEEN
VICTORIA will be larger, she will be somewhat more powerful and slightly faster than
NOORDAM.
There will also be some largely cosmetic differences in the appearance of the ship. QUEEN
VICTORIA will have a single funnel as opposed to NOORDAM's two small funnels. The new
ship will not have the mid-ship exterior glass elevators that NOORDAM has but will have a
dining area that will be slightly cantilevered and curve out over each side of the ship from the top
deck.
Cunard President Carol Marlow
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