Royal Caribbean Looks to Order New Ultra-Voyager

Royal Caribbean Cruises Ltd., along with Finnish shipbuilder Kvaerner Masa-Yards, has developed a design for a new and even more spectacular ship, the "Ultra-Voyager," and that both parties have signed an agreement that could lead to a firm order. The conditional agreement anticipates one newbuilding, deliverable in 2006, and one option, for delivery in 2007 or 2008. The agreement anticipates that the cruise line and the yard could enter into construction contracts for Ultra-Voyager, provided that certain conditions, such as the euro-dollar exchange rate, move to a more favorable position. Royal Caribbean may activate the agreement up to August 31, 2003 or under certain terms up to December 31, 2003.

The new Ultra-Voyager would be roughly 15 percent larger in space and in passenger capacity that the earlier Voyager-class vessels. It would carry more than 3,600 guests (double-occupancy), 500 more than its predecessors.

At just under 160,000 gross tons the Ultra-Voyager would provide even more room for passenger facilities and amenities and would provide even greater economies of scale than her predecessors.

Royal Caribbean has four Voyagerclass ships in its fleet today. The fifth sistership, Mariner of the Seas, is due for delivery at Kvaerner Masa-Yards Turku yard in October this year.

One key factor affecting whether this agreement leads to a firm contract is how much the current euro-dollar exchange rate improves. Royal Caribbean hopes that circumstances will allow it to finalize the order later this year and that these new berths will enjoy a lower capital and operating cost than earlier Voyager-class ships.

Royal Caribbean currently has three ships under construction in Finland and in Germany. In addition, the cruise line has options for two Radiance-class ships in Germany. With fleet capacity having grown 77 percent in the last four years, this has been the height of the company's growth spurt, or more than 15 per- C i r d e 2 1 2 on Reader Service C a rd cent annually. Adding an Ultra-Voyager in 2006 would increase capacity by 3 percent in 2006 and 2.9 percent in 2007.

If the decision is made to build an Ultra- Voyager, there would be a two-year gap between the last of the current newbuildings and the first of the Ultra- Voyagers.