RCCL and RR reach pod settlement
The Mermaid pods on the Millennium and her three sisterships have proved to be costly in terms of loss of earnings for Celebrity Cruises
Royal Caribbean Cruises Ltd. (RCCL) and Rolls-Royce (RR) have reached an amicable resolution to the lawsuit regarding the Mermaid pod-propulsion system on Celebrity Cruises' Millennium-class ships.
When they were first designed and implemented, podded propulsion was a significant technological advance over traditional shaft propulsion, but it experienced a number of technical issues in the early years of use. However, working together, Royal Caribbean and Rolls-Royce have been successful in improving the reliability of the design. Mermaid pods are installed on four Celebrity ships, i.e. Millennium, Summit, Infinity and Constellation.
"We look forward to continuing our alliance with Rolls-Royce for many years to come," said Daniel J. Hanrahan, president and chief executive officer, Celebrity Cruises. "Rolls-Royce has one of the best reputations for reliability, and guests and travel agents should feel confident in Rolls-Royce's assurances of the reliability of the Mermaid pods."
"We are not only satisfied to have reached a solution with Celebrity Cruises, but that we have been able to improve and enhance the Mermaid pod's reliability," said John Paterson, president marine, Rolls-Royce. "We look forward to the opportunity to continue contributing to Celebrity's high operating standards now, and in the future."
The settlement will generate a net increase of approximately $65 million in ‘other income/(expense)’ in Royal Caribbean's 2010 first quarter results.
In December 2008, Carnival Cruise Lines filed a $100 million suit against Rolls-Royce over pods installed on the Queen Mary 2. A Carnival spokesman said the litigation is ongoing.
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