Celebrity Replacing Millennium Pod

| Aug 30, 2013

The propulsion pod will be flown from Rotterdam to
Freeport Bahamas to repair Celebrity Millennium

A Rolls Royce Pod in Rotterdam will be flown to Freeport, Bahamas, to fix Celebrity Millennium

I am writing this article to underscore one I wrote last week ago called "Would I Cruise on Carnival Now?

In that article I wrote: "Cruise ships are complicated pieces of machinery. When something goes wrong you can't just drive a few blocks to pick up "off the shelf" spare parts. In the long run, serious ship repair (especially to engines or propulsion systems like pods or propellers) requires time to get the ship to a qualified facility where you must have the new part waiting, and then you have to take the ship out of service for a very long time. In other words, servicing a cruise ship is not a casual choice; it takes lots of strategic planning."

I further said "Anytime you need to schedule unplanned maintenance you are going to ruin someone's vacation. But when you can give people more advanced warning that their cruise must be cancelled they have a much better opportunity to reschedule flights, hotels and tours. Therefore, if a ship is displaying possible problems, the company must assess very carefully; "will it make it to the next scheduled maintenance?" and if not, "when will it be in a location where we can get the problem fixed with a minimum of downtime?"

Because of all of this - the decision to make very extensive upgrades to engines and pods has always been, for as long as I can remember, on an "as-needed" basis. Would you replace the engine in your car before it died? Probably not - because it is an expensive and time-consuming operation. Add to that question whether you are making money with that vehicle on a daily basis.

To see how serious these problems can be - let's take a look at what it will take to fix the pod that just broke on Celebrity Millennium.

Celebrity Cruises CEO Michael Bayley announced on Wednesday that Celebrity Millennium is sailing to Freeport, Bahamas, to go into a drydock to replace the entire Rolls Royce propulsion pod. That pod is being flown in from Rotterdam, Holland.

To those of you who may not know, Freeport is essentially just off the coast of Miami, and Millennium died in Alaska. That means Millennium is "dead-heading" (sailing with no passengers) down the west coast to the Panama Canal where will transit and head to Freeport - all the time relying upon her one working pod. Her last known sighting was near Cabo San Lucas, Mexico.

She is not expected to arrive in Freeport until September 3. The pod replacement procedure will start on September 6 and she will leave Freeport on September 11. After the procedure, the ship is once again scheduled to "deadhead" back to San Diego where she will resume her regularly scheduled cruises beginning September 22.

Why is she "dead-heading?" after the pod is fixed? Because it is too late to sell cruises on that trip, and it is technically a test run to make sure everything is working as expected; however, Bayley did say he would like to find a charter or charity event that could benefit from that cruise back to San Diego.

Now, to get just a tiny idea of how the logistic difficult this procedure will be read the interview with Michael Bailey in Travel Weekely last Friday. Here is what the article says:

"The decision (to end the cruise in Ketchikan, Alaska) triggered a series of logistical tests. The first was getting the 2,000 passengers home from Ketchikan, which has a population of 14,000 and an airport with a single, 7,500-foot runway. "It's a beautiful destination to go to, but it's not a destination designed to move a couple of thousand people," said Bayley. Celebrity had to charter a half dozen jets at a cost of several million dollars to do the job and sent 30 people from Miami headquarters to help.

The total cost of the Millennium incident to Celebrity hasn't been disclosed, but Bayley said it would include the compensation for two impaired cruises and four canceled ones, which all involve full refunds, plus the housing and food for affected guests, air change fees, future cruise certificates, plane charters to Ketchikan and the lost onboard revenue from the scrubbed cruises, in addition to the repairs. One Wall Street analyst has estimated the cost at $31 million, not including the repair itself, which is insured.

The Big Picture

So, the failure of this pod took at least six years, probably longer since the Carnival lawsuit was filed in 2008 and it took some time before that to identify the specific problem. In addition, fixing the pod will mean the ship will be out of service for nearly six cruises - a significant amount of revenue.

I am not going to pretend that I know it was smarter to wait until the pod failed than it would have been to bring over a new pod sooner and to fix it during a regularly scheduled maintenance. But I do know one thing - that is called ?monday Morning Quarterbacking." Now that I see how expensive it is to undertake such an operation I will say I understand how much time and effort it takes to fix a problem like this and I see why they would put it off as long as the ship is working well enough. I will give these cruise line executives the benefit of the doubt and concede that they understand these issues better than I do - both with Celebrity and with Carnival.

I heard enough people saying they knew Carnival was remiss in not maintaining Carnival Triumph, and at the same time lauding over Adam Goldstein (president of Royal Caribbean) for showing up at the fire on Grandeur to have his picture taken. Good for you, Adam, but did that picture help the people who were on that cruise? We all know it didn't, but the PR surrounding the event was much calmer than anything carnival endured.

But is the maintenance at Carnival Cruise Line any worse than the maintenance of Royal Caribbean/Celebrity? Not in any way that I can see. Both cruise lines sailed ships that were safe and working for years, but we don't live in a perfect world.

Michael Bayley apologized to the Celebrity customers who will miss their cruises. All of those passengers are being reimbursed and receiving credits good for a future cruise. Bayley also indicated there would be a substantial price tag for charter flights from Ketchikan, hotels, refunds, cruise credits, lost revenue and other factors related to the cruise where the pod failed.

But that pod suffered an electrical problem on Aug. 8 and then passed a round of testing and Coast Guard re-certification. It was on the following cruise that another problem occurred in a different part of the same pod - not related to the Rolls Royce lawsuit. And so the ship returned to Ketchikan.

Bayley said that they investigated and considered a good number of options before deciding it made the most sense to do the repairs in Freeport - thousands of miles away.

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