Carnival's classic British Liners

fred henderson
28th October 2005, 16:14
I have explained Ted Arison’s entry into the cruise business in the thread “The foundation of Carnival”. Carnival Cruise Lines was formed early in 1972 as a subsidiary of American International Travel Services (AITS) with Arison as manager. The new company bought the Canadian Pacific liner Empress of Canada for $6.5 million and renamed her Mardi Gras. Although the ship was only 11 years old, she was in poor shape and most of her accommodation was sub-standard for the cruise industry. Arison and his team set about the task of rebuilding the ship whilst she remained in service. The constant presence of a team of workmen had the combined effect of reducing the space that could be sold and deterring passengers from sailing in the ship. As a result by 1974 Carnival was very close to bankruptcy. At this time AITS was obliged to dispose of its interests in Carnival to comply with the terms of its Las Vegas gambling licence. Arison agreed to buy Carnival Cruise Lines for $1 and to take over responsibility for $5 million debts. In November 1974 a Panama holding company, Carnival Corporation, was formed to handle the investment.
The rebuilding of “Mardi Gras” with acceptable accommodation was almost complete and most importantly for the American market, a casino had been added. The marketing and sales team, headed by Bob Dickinson (Now the President of Carnival Cruise Lines) launched an aggressively advertised campaign to attract a younger clientele (25-40 year olds) to their “Fun Ship”. Most importantly, Ted’s young, college drop out son Micky Arison (Now Chairman and CEO of Carnival Corporation) took to the road and visited dozens of important travel agents to convince them that the ship was greatly improved and to persuade them to offer Carnival’s product to their clients.
Their combined efforts were successful and the load factor began to rapidly climb so that by the end of 1975, Mardi Gras was operating at 100% capacity. Carnival was saved from bankruptcy, the next step was to turn the company into a money making proposition.
It is very difficult to operate a profitable single ship cruise company. In an effort to gain critical mass, Arison proposed a number of mergers to solve this problem. He had started this initiative before acquiring Carnival from AITS. Arison approached Goulandris of the Greek Line, Keusseauglou of Sun Line and Holland America to suggest either a merger or a joint operating agreement. They all turned him down.
In January 1975 Greek Line became bankrupt and its two ships were laid up for sale. Chase Manhattan Bank took the ships against Greek Line’s debt and by the end of the year they were becoming very anxious to sell, just as Carnival had begun to restore its creditworthiness.
A Carnival team, led by operations vice president Meshulam Zonis, arrived in Greece and set up camp in a hotel owned by a friend of a Carnival employee. Room rate $11 per day, food $3 extra. They quickly established that although Olympia, which had been refitted just prior the bankruptcy, was in the best condition and cleaner, Queen Anna Maria (ex-Empress of Britain) had much more potential.
The Carnival team inspected the Queen just after Sitmar had inspected and rejected her, an event which helped Carnival’s price negotiations. The turbine covers had been removed and Zonis could see that all the correct lay-up procedures had been followed and she was mechanically sound. Unfortunately she had then been left in the hands of one or two men and as a result she was filthy and rat infested. Nevertheless Greek Line had already carried out much of the conversion work essential for American cruise operation. All of the passenger cabins had been fitted with private facilities and full air conditioning installed.
Carnival bought the Queen for $3.2 million. A very good price, considering they paid $6.5 million for the completely unconverted Empress of Canada.
AITS had recently sold its small cruise ship Carnivale, so the name became available for the Queen. She was readied for sea and sent to Newport News for cleaning, new soft furnishing and replacement of rat damaged furniture and fittings before entering service on 7 February 1976.
Once again a team of workers sailed with her until the end of the year bringing the ship up to standard. Carnivale experienced extensive plumbing problems during her first cruise, but these were resolved and she received a positive reaction from the travel trade.
In 1995 Carnival had taken over the London naval architects and marine engineers Technical Marine Planning Ltd (TMP) who had organised the technical refurbishment of Mardi Gras and they performed the same work on Carnivale. TMP continues to work from London as Carnival Corporate Shipbuilding on all ships in the Carnival fleet. Arison engaged a young Miami based architect, Joe Farcus, to redesign the interiors of Carnivale. Arison was so pleased with the result that he encouraged Farcus to set up a private practice and Carnival Cruise Line has exclusively used his services ever since.
By the end of 1976 the work was done and Carnivale’s load factors were up to 95%. The company was now in a stable, slowly growing financial situation and Carnival began looking for a third ship. They looked at many, but they were all either priced beyond their very limited budget, or hopeless for the American cruise market. It came as no surprise to Zonis that while he was on holiday in the autumn of 1977, he was asked by Arison to travel to Britain to view the SAFMARINE/ Union Castle liner S A Vaal. She was a most unlikely candidate for cruise duties. Although she was 32,697 tons, she was designed to carry vast amounts of cargo and only 728 passengers, many in extremely small cabins. What impressed Zonis however was the space. Since 1972 he had been trying to shoehorn acceptably sized and equipped cabins into Carnival’s two ex – Canadian Pacific ships. S A Vaal offered space in abundance. In addition both the Union Castle crew and office staff were pushing Zonis hard. They knew of the great work done by Carnival on their two CP ships, and they wanted S A Vaal to go to a good home. Zonis telephoned Ted Arison and urged him to act quickly to buy the ship. Without seeing her, he bought S A Vaal for a bargain $3 million.
Carnival also came close to buying Windsor Castle but did not do so because of a mistaken identity. Zonis knew that a Greek owner was interested in the ship. The Carnival team thought the potential buyer was Chandris, with whom they had developed a cordial relationship. So Carnival did not bid, only to find that Latsis was the buyer and Windsor Castle went off to Jeddah as a hotel.
I feel that it would have been a mistake to buy both ships. S A Vaal was renamed Festivale and sent to Kawasaki for a complete rebuild. In many ways these old ships needed the same treatment as a city centre classical building, where the facade is retained but everything behind the outer wall is demolished and a completely new building created at considerable expense. Carnival applied the same philosophy to the rebuilding of Festivale at a cost of $20 million. I doubt if they had the capital at that time to convert two ships to the same standard.
Festivale re-entered service on 31 August 1978. She was now able to accommodate 1,432 passengers and had a wide range of new public rooms. She was the largest and fastest cruise ship operating in the Caribbean and was an instant success.
With all three of Carnival’s ships making excellent profits, the Arison’s decided that it was time to build their first new ship.

Fred

EMMESSTEE
31st October 2005, 20:46
Fred -

A most interesting account - thank you.

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Mike.