This whole project started just over five years ago. We were negotiating the contract for what would become Freedom of the Seas and we were apart on price. Harri Kulovaara, Adam Goldstein, and I met at the Heathrow Hilton hotel in London to consider our options. As a way of bridging the gap, we came up with a proposal we thought would help the yard meet its financial needs (wishes??) and provide us with something of value.
An addendum about my trip to Turku.
The ship is 83% complete but still looks very much like a construction site. At this stage, all the basic structure is complete: the ship is floating, the inside partitions are clearly visible but not covered, and most of the electrical/plumbing/ventilation systems are in place. In effect, the bones all there but there is no skin on the bones. This is a critical time in the construction process. It is the time when the largest number of workers is physically onboard building stuff and you can see significant progress on an almost daily basis. Last week, there were 2,300 people working onboard. I certainly hope they all know what they are doing!
I’ve returned to Turku for another review of construction progress and meetings with the shipyard. A lot of progress has been made since my last visit, but it all still very much looks like a construction site.
OK, OASIS is a wonderful ship but it costs $1.4 billion. How do we pay for it?
We’ve just publicly answered that question. With most ships, we borrow 80% of the contract price and we fund the remaining 20% plus the non contract expenses (architects, interest, owner supply, etc.) from our operating cash flow. Normally, we arrange that borrowing a few months before delivery and – normally – this is a relatively easy process. But, in case anyone missed it, these are not normal times and normal financing is abnormal today. (more…)
Part of the reason our ships come out so well the first time is that we cheat. The first ship isn’t really first. For key areas, we build mock-ups so we can see what the final product will be like. And we always find that we learn something in the process. No matter how much time and effort we devote to studying the plans or even the models, there is just no substitute for being able to see and touch a full scale version of the item. (more…)
