Costa Group is pioneering environment-friendly sailing with its LNG newbuilds
This article was first published in the Autumn/Winter 2017 issue of International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed.
Michael Thamm is enjoying the challenge of his recent extended appointment as CEO of Carnival Asia. “I am excited about growing our company’s industry-leading presence in such a strategic region,” he says. “It will be my priority to strengthen Carnival Group’s partnership with the Chinese Government and local business partners, to develop a robust ecosystem that will make China a frontrunner in the global cruise market. Looking beyond China, we have identified several countries with great opportunities to grow the business.”
Thamm is combining his commitments in Asia with his day-to-day role as head of Costa Group. “To guarantee a good leadership you need daily interaction with your people,” he says. “I’ve been spending more time in Asia during the last few months, but we are a global company. Thanks to a capable and structured organisation and today’s technology, which shortens the distance, it is much easier to communicate and be continuously connected.”
It’s a fruitful time for Costa Group, with both Costa Cruises and AIDA Cruises enjoying continuous growth in passengers and yield over the past 12 months. “We confirmed our leadership in Europe and China with three million guests carried in 2016, an increase of 13% versus 2015,” says Thamm. “In 2017, we expect further growth due to the recent introduction of the new AIDA Cruises flagship, AIDAperla, which will further strengthen our leadership position.”
An ambitious expansion programme is now underway, which will see the group’s fleet increase to 33 ships in the next four years. “In the next 12 months, we will focus on introducing AIDAnova in Germany, with innovative features specifically designed for our German guests,” comments Thamm. “This will be the first ship in the industry to be powered at sea by LNG, representing a major environmental breakthrough. We’re also working to prepare the launch of Costa Cruises’ first tailor-made newbuild in the China market, starting from the first quarter of 2019.”
Costa Group’s commitment to a cleaner environment is central to its strategy, and the company’s environmental sustainability goals exceed the requirements of current national and international regulations. “Respect for the environment is not only a duty, it is the route to enabling the company’s sustainable development,” explains Thamm. “We are proud to be the pioneer of a new era that will bring significantly reduced exhaust emissions and help to protect the environment as well as setting an example for other companies.”
To this end, Carnival Corporation has installed industry-first exhaust gas cleaning (EGC) technology on 60% of the fleet, aiming to cover more than 85 vessels across its global fleet by 2020. Costa Group is rapidly deploying EGC technology in its fleet and to date, seven Costa Cruises and six AIDA vessels are equipped with this technology.
“Costa Group’s LNG newbuilds will be the first in the cruise industry to use LNG in dual-powered hybrid engines to power the ship both in port and at sea,” Thamm says. “This is a natural development of AIDAprima and AIDAperla, which are currently the only two cruise ships within the global fleet that can operate on LNG while in port.”
Safety is also a key priority, and the group has implemented state-of-the-art technology at the Carnival Maritime Fleet Operations Center (FOC) in Hamburg to provide constant visibility on the fleet’s nautical and technical conditions.
“The FOC operates 24/7 and constantly communicates with our captains at sea to support them on any potential issues,” says Thamm. “A knowledgeable staff assists the ship’s crew in making the right decisions, such as prompt itinerary rerouting in adverse weather conditions to increase navigational safety and fuel savings. All the information regarding routes, position, engine condition, stability and other related matters – almost two million data points from 700 sensors per ship daily – is available in real time. The technology is used, for example, to reduce energy usage, optimise waste management and operate our ships in the most efficient conditions. The data is also used for long-term analysis, such as optimising the engine in relation to speed and improving maintenance planning.”
Looking ahead, Thamm says Europe, Asia and South America are the focus areas for passenger growth. “We are market leaders in continental Europe and we are focused on further developing the European markets with four new environmentally friendly ships to be delivered to AIDA and Costa Cruises between 2018 and 2021,” says Thamm. “South America is also a historical market for Costa with 70 years’ presence in the area. The brand is very well recognised with two ships sailing the winter season and sourcing mainly Brazilians and Argentineans.”
As Thamm’s recent appointment suggests, Asia holds significant promise. “The cruise industry in Asia is growing at a record pace and China is the key engine driving this growth,” he says. “There is still tremendous potential to be tapped. In the US, cruising represented around 36% of overseas outbound travel (excluding to Mexico and Canada) in 2015. In the same year in China, about 3% of overseas trips (excluding to Taiwan, Hong Kong and Macau) were cruises. With such a low penetration rate, there is clear growth opportunity for our industry.”
Costa Group currently has five ships based in Asia, mainly dedicated to local customers, and it is planning to grow significantly in the coming years with two additional newbuilds to be introduced in 2019 and 2020 under the Costa brand. “Last April we deployed a ship year-round out of Japan which represents a new market for us with great potential,” says Thamm. “In addition, through a joint venture with a Chinese state-owned enterprise, Carnival Corporation is planning to launch a cruise brand in China with an agreement to order two new cruise ships starting from 2023, plus an option for four additional ones.”
As Costa Group expands in new and existing markets, its continued focus on itinerary will be the bedrock of success. “Costa Group has always dedicated tremendous efforts to search for new and appealing places, putting safety first,” says Thamm. “We believe itinerary for cruising is a fundamental element of the overall guest experience.”