Carnival Cruises 2008 Annual Report Download - page 10

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Costa is Italy and Europe's #1 Cruise Line based on guests carried and capacity of its
ships, and boasts over 60 years of cruising history. Costa operates 12 contemporary ships,
with two additional ships contracted for delivery in 2009 and one ship in each of 2010, 2011
and 2012. With these five new ship additions, Costa's existing capacity will grow by 58%.
Costa offers guests an international and multi-lingual ambiance with an Italian touch.
Costa principally serves customers in Italy, France, Spain and Germany, but its 1.2 million
2008 guests came from over 160 different countries. The Costa brand offers a higher-end
contemporary product in Germany and Spain and thus segments these markets where we also own
and operate the more mid-contemporary AIDA and Ibero brands.
The Costa ships call on 250 ports around the world, with 100 different itineraries,
most from seven to 11 days. Costa's ships operate in Europe from spring to fall. From fall
to spring Costa repositions two of its ships to the Caribbean, three of its ships to South
America, two of its ships to the Arabian Gulf to homeport in Dubai, one of its ships to the
Indian Ocean to homeport from the Island of Mauritius and maintains a year-round presence
with three of its ships in the Mediterranean. See Part I, Item 1. Business. B.- "Cruise
Operations – Australia, New Zealand and Asia" for additional discussion of Costa's expanding
operations in Asia.
We have a joint venture agreement with Orizonia Corporation, Spain's largest travel
company, under which we operate Ibero, a Spanish cruise line that began operations in 2003.
Ibero currently operates three contemporary cruise ships. Substantially all of Ibero's
guests are sourced from Spain, Brazil and Portugal. Their ships are especially tailored to
the Spanish market, including Spanish speaking officers and crew as well as Mediterranean
and Spanish style food and entertainment. From March to October, Ibero's ships offer seven-
day Mediterranean and Northern European sailings homeported in Barcelona, Spain, Venice,
Italy, Athens, Greece, Istanbul, Turkey, Copenhagen, Denmark and Helsinki, Finland. From
November 2008 to February 2009 two of its ships are time-chartered to an unaffiliated
Brazilian tour operator. In November 2009, we expect to transfer Carnival Cruise Lines'
1,450-passenger capacity Holiday to Ibero. Holiday will undergo a multi-million dollar
refurbishment before being renamed the Grand Holiday for her first Ibero sailing expected in
spring 2010.
c. Germany
Germany is the largest source market for cruise passengers in continental Europe, with
approximately 0.8 million cruise passengers in 2007. Germany had a compound annual growth
rate in the number of cruise passengers carried of approximately 12.2% between 2002 and
2007. We believe that Germany has significant growth potential for the cruise industry as
the level of market penetration is estimated at approximately 29% of North America. We
intend to increase our penetration in Germany through AIDA, the most recognized cruise brand
marketed in Germany.
AIDA, which began operating in 1996, sources substantially all of its guests from
Germany and German speaking Austria and Switzerland, and is the leader in the German cruise
market. AIDA operates five contemporary ships, with one additional ship contracted for