Ally

Carnival Corporation is cutting prices on its Caribbean sailings for the second half of the year to counteract sluggish bookings.

Announcing its second quarter results, it said earnings for its North American and European cruise brands were in line with expectations, despite price pressure on Caribbean sailings.

Revenues increased 5.8% to $2.66bn compared to 2005 due to a 4.5% increase in capacity and increased revenue yields.

Net revenue yields rose 1.5% compared to the previous year, while net cruise costs per available lower berth day increased 4.6% mainly due to higher fuel costs.

Profit after tax decreased by 2.1% to $380m.

Chairman and chief executive Micky Arison said: "Based on what we see at this point, we are expecting a solid increase in revenue yields from our European cruise brands in the second half of 2006.

"Additionally, pricing for our North American brands for European and Alaskan itineraries is ahead of the prior year.

"However, there remains considerable softness for Caribbean sailings in the second half of 2006. We have responded with more aggressive pricing strategies which have resulted in a solid increase in bookings over the last few weeks."

Despite sluggish Caribbean bookings, the company continues to expect full year net revenue yields to increase 1% to 2% on both a current and constant dollar basis.

Carnival Corporation has 13 cruise brands including Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn Cruise Line, Cunard Line, Ocean Village, P&O Cruises, and Swan Hellenic.

By Bev Fearis

(TravelMole)