Could Viking purchase another cruise line?

[Stateroom_Sailor]

With all the turmoil in the cruising world today, I have to wonder who will go bankrupt, sell off ships, or even an entire cruise line.  Given that Viking was the first to call off cruising for Covid-19, and seems to be treating their passengers well (at least compared to Carnival, Royal, Norwegian, and MSC), I'm rooting for a Viking expansion.  We've never sailed on Viking Ocean, but definitely have our eye on a Viking River Cruise.  If new options arise, they would be a welcome addition.

[Peregrina651]

Sorry to disappoint, but personally, I don't see it happening. 

 

Viking is a closely-held company -- not publicly traded and not answerable to hundreds of thousands of stock-holders who are only interested in dividend check. The company already has one of the largest fleets in the industry, most of which are owned outright by the company. Torstein Hagen has a vision of what cruise travel should be and built his company from scratch based on that vision. He is not looking to go main-stream, a model which he rejected when he first started his company. He has carved his niche among comfortably retired travelers who are willing, able and quite ready to pay just a bit more for what Viking offers -- no kids, no casinos, no steel drums, and an on board ambience that is built on treating its guests and its employees as responsible adults.

 

That said, I just don't see him buying another cruise line and trying to Viking-ize it nor do I see him him buying another a cruise line and running it under its current operating philosophy, one that is counter to the brand that he has spent the last 20 years building.

[Homosassa]

I agree with Peregrina651.

 

Unless there is some reason to buy the assets of another line that directly competes with Viking in their targeted market demographic, why try to cheapen the Viking name and experience.

 

 

 

[Captain_Morgan]

Considering that Viking is heavily leveraged according to publicly available information I doubt very much that they will be buying any new ships any time soon let alone other companies.  
Unless they get a massive cash infusion from the Saudis or Chinese (again) I doubt there will be nearly as much fleet growth as was originally planned.  That of course goes for all brands with respect to adding new tonnage and if anything I expect to see a ‘slimming’ of the brands currently in operation as a means to cut and recoup costs long term.  

[philw1776]

Viking is all about the brand.  A quality brand that features new, open vista ships w/o the "features" (casinos, slides, etc.) that other cruise lines offer.  Buying a cruse line with its off-brand, ill-suited ships would only cheapen and destroy the Viking brand, so no.

 

OTOH I doubt Viking has the cash or access to the cash to do this.

 

Better to use that cash if it exists to build MORE superior sailing vessels designed from the waterline up for comfort and visibility.

[Jim Avery]

Viking has the newest overall fleet operating. We are used to the style and amenities of these ships. I can not see any possible benefits for Viking buying other lines older ships. Not to forget they would need total refits to meet the style and amenities of the existing Viking fleet. Better, as Captain Morgan says, continue with the new building as already exists albeit at a reduced pace as necessary.

[Liz Masterson]

Wait... what?  No steel drums? Ever? 
I don’t mind an occasional talented steel drummer in the right climate with a nice rum drink. 
Not every night... but at the right moment. 
 

[Heidi13]

I believe that in addition to the original 4 Russian river ships that started the company, they bought a European River Cruise Line way back in 2000. The primary objective wasn't so much the ships, but the ready access to prime docking locations throughout Europe. None of those ships are still around, as Viking only has 1 ship from 2009, with most ships newer than 2012.

 

The Viking business model is about delivering a consistent product, with the Ocean ships having many similar features to the River Longships. With Viking Ocean, all current ships are identical and while some of the newbuilds will be marginally bigger for compliance with new stability requirements, from a passenger perspective, they will be identical to the current ships. This has many benefits for pax, crew and cruise line operations.

 

With the current Viking model, new officers require familiarisation upon joining their first ship, with the length depending upon rank. If you introduce different classes of vessel into the fleet, you incur significant additional familiarisation costs, as officers require a familiarisation period on each class of vessel. As an example, as S/2/O, our son received a 2-week handover when joining a new class of vessel. On my last company, if moving to a new ship and route, the familiarisation could be 1 month for an officer and 2-months for a Captain. Another consideration to purchasing used tonnage, with different machinery, is an increase in maintenance, tooling and training costs. If the ships have different engines, the engineers require training on a new OEM maintenance.

 

The Viking business model has worked well, based on the rapid expansion of both River & Ocean fleets, so I don't see where purchasing another style of ship would fit into their current business model.

 

If Viking has the ability and demand to expand beyond their current plans, I suspect many building slots will be opening, with aggressive pricing, as confirmed orders are cancelled or delayed. Building additional new tonnage, would suit the business model more than purchasing used tonnage.

[Baron Barracuda]

Regardless of whether Viking has the financial wherewithal purchase a competitor why take risk in such uncertain times?  Who knows when sailing will resume and whether the public will embrace cruising when it does?    Better to conserve cash while we wait for a vaccine or at least a therapeutic.

[Redtravel]

Viking has built their own ships that fit their experience.  In some places, they rent ships. These ships were not built to Viking specs.  While, those cruises have the Viking experience..tours, food, etc., they lack some amenities.  There have been cruise lines that went bankrupt and their ships were sold off.  Renaissance went out of business. Their ships were sold off to pay off debts.  They were bought by a Oceania, Azamara, Princess,  they are nicely furnished, but cabins are small. Bathrooms are among the smallest of any cruise ship. Not luxurious.  I have sailed on Azamara and Oceania R SHIPS. NOT my favorites.  They certainly would not meet a Viking standards.  Viking is already the largest cruise line with 70+ ships and more scheduled to be built. They don’t need to acquire other cruise line castoffs.

[Captain_Morgan]

It’s a bit misleading to say Viking is the largest cruise line with 70+ ships when 90% of their ‘fleet’ are river boats that are only operational for half the year and not ships.  
 

[Stateroom_Sailor]

7 hours ago, Homosassa said:

I agree with Peregrina651.

 

Unless there is some reason to buy the assets of another line that directly competes with Viking in their targeted market demographic, why try to cheapen the Viking name and experience.

 

 

 

 

You have to imagine the appeal of a "Viking Saga Fun Ship"

 

[Stateroom_Sailor]

Thanks for your answers, it makes sense, especially for Viking Ocean.  I've actually been wondering for years how the mass market could withstand even a normal recession, given the endless flow of over leveraged megaships, minimal profit per passenger, and race to the bottom with price and quality.

 

Coming from a bias perspective, I would still enjoy seeing a new line form, while keeping a conservative growth, independent nature, and quality standards in mind, perhaps something that competes closer to Oceania.

[Homosassa]

Maybe, just maybe, if for some unknown reason Viking wishes to offer a slight different experience, another brand could be developed that offers the same high level of service but allows children (lower age limit to be determined) as passengers.

 

The number of children on board would be limited and the children would be directly under the supervision of parents at all times.

[aungrl]

7 hours ago, Heidi13 said:

I believe that in addition to the original 4 Russian river ships that started the company, they bought a European River Cruise Line way back in 2000. The primary objective wasn't so much the ships, but the ready access to prime docking locations throughout Europe. None of those ships are still around, as Viking only has 1 ship from 2009, with most ships newer than 2012.

 

The Viking business model is about delivering a consistent product, with the Ocean ships having many similar features to the River Longships. With Viking Ocean, all current ships are identical and while some of the newbuilds will be marginally bigger for compliance with new stability requirements, from a passenger perspective, they will be identical to the current ships. This has many benefits for pax, crew and cruise line operations.

 

With the current Viking model, new officers require familiarisation upon joining their first ship, with the length depending upon rank. If you introduce different classes of vessel into the fleet, you incur significant additional familiarisation costs, as officers require a familiarisation period on each class of vessel. As an example, as S/2/O, our son received a 2-week handover when joining a new class of vessel. On my last company, if moving to a new ship and route, the familiarisation could be 1 month for an officer and 2-months for a Captain. Another consideration to purchasing used tonnage, with different machinery, is an increase in maintenance, tooling and training costs. If the ships have different engines, the engineers require training on a new OEM maintenance.

 

The Viking business model has worked well, based on the rapid expansion of both River & Ocean fleets, so I don't see where purchasing another style of ship would fit into their current business model.

 

If Viking has the ability and demand to expand beyond their current plans, I suspect many building slots will be opening, with aggressive pricing, as confirmed orders are cancelled or delayed. Building additional new tonnage, would suit the business model more than purchasing used tonnage.

Andy, can you do one more click of detail on the “some of the new builds will be marginally bigger for compliance with new stability requirements” point?  What are the new stability requirements and how does this impact the ship size?  

[Heidi13]

53 minutes ago, aungrl said:

Andy, can you do one more click of detail on the “some of the new builds will be marginally bigger for compliance with new stability requirements” point?  What are the new stability requirements and how does this impact the ship size?  

 

From what I recall, the new amendments apply to new builds from 1st Jan 2020. They are meant to enhance damage stability and subdivision, including some additional requirements for Watertight doors. When I read the changes, I quickly started yawning, only lasting a few pages after the application and definitions. They are predominantly directed at Naval Architects.

 

Were I still working, I would have stuck it out, but in retirement, I prefer less technical reading material.

 

Being aimed at Naval Architects, I am not sure how they will address the requirements when designing the new ships. However, discussion on the Viking Sun suggested they will be slightly bigger, whether that is longer or beamier, or higher, I am not sure.

 

Sorry, not much help on this one.

[aungrl]

Just now, Heidi13 said:

 

From what I recall, the new amendments apply to new builds from 1st Jan 2020. They are meant to enhance damage stability and subdivision, including some additional requirements for Watertight doors. When I read the changes, I quickly started yawning, only lasting a few pages after the application and definitions. They are predominantly directed at Naval Architects.

 

Were I still working, I would have stuck it out, but in retirement, I prefer less technical reading material.

 

Being aimed at Naval Architects, I am not sure how they will address the requirements when designing the new ships. However, discussion on the Viking Sun suggested they will be slightly bigger, whether that is longer or beamier, or higher, I am not sure.

 

Sorry, not much help on this one.

Not at all!  That was just the right amount of help. 

[Ragnar Danneskjold]

The added stability is to accommodate the ever expanding waistlines of the cruising public. Ships have been getting top-heavy lately....

[Cienfuegos]

Viking Ocean seems to have done an excellent job of identifying its target market, and delivering a clean, respectful, and consistent travel product.   I don't know its occupancy levels, but I suspect they are very high. And they're able to command a premium price and restrictive terms in a crowded cruise market.

 

 

[Peregrina651]

On 4/22/2020 at 10:20 PM, Ragnar Danneskjold said:

The added stability is to accommodate the ever expanding waistlines of the cruising public. Ships have been getting top-heavy lately....

 

Just another reason that the new mega ships freak me out. Poseidon Adventures.

[ClevelandKid]

On 4/22/2020 at 1:41 PM, Redtravel said:

Viking has built their own ships that fit their experience.  In some places, they rent ships. These ships were not built to Viking specs.  

If memory serves me correctly, there is a law that requires ships plying American waters to be flagged as American (not a lawyer but I remember this was a problem getting supplies to Puerto Rico after the hurricane).  I think Viking rented some ships to comply with that.  Their Mississippi river boats are being built in America and will be flagged as American.  Once they come online, I think the rented boats disappear. 

[Redtravel]

37 minutes ago, ClevelandKid said:

If memory serves me correctly, there is a law that requires ships plying American waters to be flagged as American (not a lawyer but I remember this was a problem getting supplies to Puerto Rico after the hurricane).  I think Viking rented some ships to comply with that.  Their Mississippi river boats are being built in America and will be flagged as American.  Once they come online, I think the rented boats disappear. 

No doubt that Viking is building a ship for the Mississippi. US regulations require US registration if a ship only sails in American waters. Viking is not rented any ships or boats solely in the US.  The rented ships are mainly in Russia, China, Egypt, and Vietnam.  By now Viking may have bought some of these ships outright. They were not built to Viking specs. While most are nice, they are not as nice as a ship specifically built for Viking.  Viking owns a huge fleet.  

[duquephart]

3 hours ago, ClevelandKid said:

If memory serves me correctly, there is a law that requires ships plying American waters to be flagged as American (not a lawyer but I remember this was a problem getting supplies to Puerto Rico after the hurricane).  I think Viking rented some ships to comply with that.  Their Mississippi river boats are being built in America and will be flagged as American.  Once they come online, I think the rented boats disappear. 

 

Passenger Vessel Services Act. All those cruise ships out of Seattle, San Francisco, etc, make a stop in Canada (Victoria usually)  in order to avoid violating the act. Mississippi river boats would need to American built/owned/flagged/crewed in order to comply. That's why Viking will be leasing. Also why they will not be able to pay slave wages, hence the increased cruise costs.

[Cienfuegos]

I am speculating that the Viking US  river ships and  Great Lakes ships will likely be owned by an affiliated company. In addition to paying US wages, this business will be subject to US income taxes. And could be unionized, if the employees so decide

[Jim Avery]

As to the Mississippi river boats, it was published that Edison Chouest Marine would be building the boats at their South Louisiana yard and would own the vessels.  Not sure if they would manage the US crews too.  Viking would be leasing the boats from them.  Under current law, the only way for them to participate in the US river market.  How the end product compares to Vikings current offerings is pure speculation at this point.