Oceania Cruises Insignia Is Leaving The Fleet – Capacity Controls????

I have had a few very interesting industry-insider onversations as of late concerning the rapid expansion of Seabourn and Oceania cruise lines.  They have been taking some very different approaches and, to be sure, there is one that Oceania took that I just new would be coming…but Oceania denied it UNTIL NOW!

Oceania announced today that it is chartering the Insignia to Hapag-Lloyd starting in the spring of 2012 (just a year from now).  This coincides with the arrival of Oceania’s second larger ship, the Regatta.

What this does is reduce Oceania’s capacity (seeing the softness in its 2011 sailings to Alaska for example and the issues Seabourn has with too much new capacity too quickly) in order to prevent issues and it significantly reduces its operational and staffing costs…with many of its Insignia crew obviously being targeted to staff the new ship or rotate to the other Oceania ships as that staff is used for Riviera. 

If you think about it, Oceania will then have a net increase in births of less than 50% of what was expected and that really is a boost for a company with a focus on a quality product and a strong bottom line.

You may recall that I have wondered for quite a while how Oceania is going to market two totally different types of ships (the R-Class having smaller cabins while the Marina-Class have near suite accommodations and far more dining options).  I have gone so far as to conjecture that Oceania and Regent Seven Seas will, in one way or another, combine as there is far more symmetry between Regent’s Voyager and Mariner than the R-Class ships. One year ago to the day I wrote Hello Oceania Marina…and, Quite Possibly: Bon Voyage, Regent Seven Seas.  Last month I wrote: Oceania Cruises to Acquire Regent Seven Seas Cruises: A Theory?

Unlike Seabourn that has a clear symmetry with all-suite ships and consistent (if different) venues and, thus, a consistent market, Oceania is obviously faced with a conflict in markets that goes far beyond the Inside Cabin to Suite concept on a ship to a conflict as between the ships themselves.  If you look at Celebrity, it has made a clear focus on the Solstice-class and is in the process of ridding itself of its older hardware and “Solsticizing” its Millennium-class ships.  That simply is not a viable option for Oceania as the differences are just to great.

So is Oceania in the process of jettisoning its older ships?  And is it doing so in a way that it makes sure those ships do not become much in the way of competition?  Hapag-Lloyd seems to fit that model.

We shall see.