Carnival buoyed by rise in bookings

Carnival, the Miami-based cruise ships group that merged with P&O Princess Cruises earlier this year, said bookings have bounced back from their depressed levels during the war in Iraq, but selling prices continue to be weak.

The company posted better-than-expected earnings for the three months to 31 August yesterday, helped by the closure of several former P&O offices in London.

Micky Arison, the chairman and chief executive, said revenues (after passenger air fares and travel agency fees) fell 3.4 per cent in the quarter, but that was better than the 4 to 6 per cent the company had been predicting. "The difficult environment that the leisure industry has experienced during 2003 is virtually unprecedented. For the company to have earned nearly three-quarters of a billion dollars in the third quarter alone, speaks volumes about the power of our global brands and the ability of their managements to perform during challenging times," he said.

Net income was $734.3m (£459m) compared with $500.8m last year before the merger. Revenues were down 5.2 per cent compared with the total for the two companies last year, and Carnival shares fell 9p to 2,063p in London after Mr Arison said the fourth quarter had begun with little improvement in selling prices.

Occupancy levels on Carnival's 70 cruise ships are now almost back to last year's level, he said, but passengers are still putting off bookings until close to sailing and prices are still down 4 to 6 per cent on last year.

Savings from the merger and benefits of scale are offsetting the costs of introducing a new ship, the Queen Mary 2.