Oasis of the Seas Sunk into Doubt

February 27, 2009 by admin 

Oasis of the Seas is set to cost Royal Caribbean a cool $1.2 billion, however in Royal Caribbean’s annual 10-K filing with the U.S. Securities and Exchange Commission they stated “Although we believe that we will be able to, there can be no assurance that we will be able to do so (finance the ship) or that we will be able to do so on acceptable terms.”

Even though Royal Caribbean says Oasis is three quarters built, there are doubts if she will ever set sail, so does this mean that Oasis of the Seas is sunk? If so what effect will that have on Royal Caribbean?

Well recently Royal Caribbean’s credit rating was lowered as they struggle with cash flow due mainly to people spending less on board. Added to this the current financial markets will make it difficult for Royal Caribbean to gain monies from elsewhere. They do have however government financing guarantees from Finnvera, the export credit agency of Finland. This is for 80% of the financed amount for both Oasis of the Seas and Allure of the Seas which is also currently being constructed. Though the guarantees are in place Royal Caribbean has yet to line up actual financing for the vessels.

So is Oasis of the Seas sunk before she even sets sail, probably not, this ship will create so much expectancy that she will fill her cruises for a couple of years at least and after all Royal Caribbean will need to get some of their money back.

That all said I think very few cruise lines will be announcing new builds in the next couple of years, after all the order books are already full, yet the ships are not!

Let’s hope Royal Caribbean get to bottom of this, let’s hope Oasis of the Seas is not sunk before she even sets sail.