In April, Carnival Corp. gobbled up another piece of the cruise pie. The company clinched a $500 million deal to buy a controlling interest in Cunard Line from Finland-based Kvaerner/ASA, Cunard's parent company.
You probably associate the name Carnival more closely with "fun ships" than with names such as Cunard, but the Miami corporation also owns or has majority stakes in Holland America Line, Windstar Cruises, Seabourn Cruise Line and Costa Cruises. Still, news that Carnival will add the world's oldest cruise line to its roster came as something of a stunner.For 158 years, the Cunard name - no matter who owns it - has been as synonymous with ocean travel as Magellan.
In 1840, Samuel Cunard built the company's first ship - the 1,154-ton wooden paddle-wheel steamer Britannia. Sixty-three passengers made the line's first 14-day trans-Atlantic voyage from Liverpool, England, to Boston, ushering in the heyday of regularly scheduled transoceanic crossings. Just how long ago that was can be put another way: One of Britannia's earliest passengers, Charles Dickens, still was penning his novels by candlelight. And cruising per se, much less Carnival, wasn't even a glimmer on the horizon yet.
The threads of Cunard's vaunted history even once wound around White Star Line, which built the Titanic. Cunard purchased White Star in 1934, a merged enterprise known for the 15 years as Cunard-White Line. By the 1950s, Cunard 12 liners in service, and it carried one-third of all passengers who crossed the Atlantic.
Fast forward to 1996, when Finland-based Kvaerner acquired Cunard and attempted to reinvent what was, by then, a mixed-bag fleet into an all-luxury line, albeit still with a British pedigree. To that end, Kvaerner sold off several vintage Cunard vessels and currently operates only five: the QE2, in a class by itself; Royal Viking Sun, a consistently highly rated ship by most guidebooks' standards; the twin Sea Goddesses I and II, dubbed super-yachts by Cunard; and Vistafjord, more of a classic liner.
No one could quibble with calling Cunard venerable - nostalgic even. Unlike its competitors, which introduce new ships every year, Cunard's youngest vessel, the Royal Viking Sun, was built a decade ago and purchased by Cunard in 1994.
Almost since the first, the British line proved unprofitable for its Finnish owners, which soon started shopping around for a buyer. Many travel experts speculated that Cunard's days were numbered. Some worried that, in its eagerness to unload the line, Kvaerner would sell off Cunard's remaining ships, ultimately closing the door forever on the last vestiges of Samuel Cunard's creation.
Cunard was considered close to curtains by some experts. "Why doesn't Cunard just build a new ship and name it the Princess Diana?" quipped M.T. Schwartzman, editor of the Fodor's guidebook Cruises and Ports of Call. "It would draw a whole new level of demographics to the stodgy line."
Within days of Schwartzman's comment, Carnival scooped up Cunard.
Is it good news? Reactions all seem to indicate that it is. Even the stock market was bullish on the buy: Carnival Corp.'s stock increased nearly 5 points at the announcement of the news (though the deal still is subject to review by the Securities and Exchange Commission because Carnival is a publicly traded entity.)
For Cunard, it's the best possible scenario. Not only is the line snatched from the jaws of the grim reaper, but, as with all other Carnival Corp. acquisitions, it will likely continue as a separate entity. Carnival, often called a "friendly suitor," has an excellent track record of keeping individual lines and their identities intact.
And while aspects of the terms of the acquisition are still pending, Carnival also reached agreement with Kvaerner Masa-Yards, the shipyard owned by Cunard's parent company, to develop a design for a completely new class of Cunard-named ships.
For Carnival, the picture looks even rosier. Despite all the lines it owns, Carnival remains a tiny player in the luxury arena, represented now only by Seabourn. But with the purchase of Cunard, Carnival will garner a commanding share, creating the industry's largest single fleet of luxury ships when Royal Viking Sun and the Sea Goddesses are added to Seabourn's three vessels.
However, even those who reacted favorably to the news expressed concern that this latest example of industry consolidation is just another sign that cruising will some day belong only to the Big Three - Carnival, Princess Cruises and Royal Caribbean International - which collectively already own and operate 61 vessels.
The Carnival announcement, coming as it did in early April, even sparked some April foolery. Making the rounds on the Internet, this tongue-in-cheek headline spoofed the acquisition: "Royal Caribbean, Carnival and Princess to Merge."
Obviously, that's a highly unlikely scenario. However, mergers and acquisitions, which have become the industry norm, do concern a lot of folks. Travel agents worry that mergers reduce the number of consumer choices; they would prefer the more choice the merrier. With cruise lines and ships becoming more homogeneous, the lines of distinction between ships begin to blur, they say.
"I look at it as clothing," said Lucy Hirleman, a cruise consultant with Berkshire Travel in Newfoundland, N.J."There's a ship out there for everybody ... and maintaining those differences is important for consumer choices."