23 July 2008

Royal Caribbean axes 400 jobs

Royal Caribbean Cruises is to make 400 job cuts after posting lower second quarter earnings.

The groupââ¬â¢s second quarter net income was $84.7million, thatââ¬â¢s $0.40 a share, which is down on the same period in 2007 when it was $128.7 million and $0.60 a share.

The company says it plans to slash costs by $125 million a year and will do so by shedding 400 shoreside positions and getting rid of non-core business such as its  ââ¬ÅâœScholar Shipââ¬~ which is an educational programme for college student to study abroad at sea.

RCI blamed high fuel prices for the move. CEO Richard Fain said: ââ¬ÅâœToo much of our profitability is being eroded by the increase in fuel prices. This is unacceptable and we are evaluating everything we do to find ways to do it more efficiently and effectively.ââ¬~

Despite headline falls, however, net income for the first six months of 2008 was stronger than 2007, at $160.4 million and $137.6 million respectively.

With demand for cruises still strong, forecasts show net yields up 3% to 4% for the full year of 2008 which is in line with expectations disregarding the high fuel cost factor.

By Dinah Hatch

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