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Carnival inks 12-year deal with Wartsila, targets fuel savings

Wartsila to handle all engine maintenance and monitoring work for 79 of Carnival's ships.





Updated on 25 Jan 2017 12:06 GMT

Wartsila and Carnival Corporation & plc announced on Wednesday that they have signed a 12-year agreement for Wartsila to handle all engine maintenance and monitoring work for 79 of Carnival Corporation's vessels.

The value of the long-term agreement is approximately EUR 900 million. The expected revenues for 24 months, approximately EUR 150 million, are to be included in Wartsila's order book for the first quarter of 2017. As the contract becomes effective as of 1st April, Wartsila's expected revenues for 2017 from the contract are EUR 56 million.

The deal includes Wartsila's Dynamic Maintenance Planning (DMP) and Condition Based Maintenance (CBM). These services are based on capturing digitalised data streams from every engine, after which this data is analysed by specialists. This is designed to provide real-time optimisation of the equipment while predicting operational and maintenance demands. With the DMP and CBM in place, vessel and fleet operations are optimized and engine overhaul intervals potentially extended.

With approximately 400 Wartsila engines covered under the agreement, the Finnish manufacturer points out that even the smallest improvements in vessel fuel consumption can add up to significant annual savings in fleet operational costs.

"Potential savings in fuel costs are counted in tens of millions of dollars per year," Wartsila said.

"Our agreement with Wartsila extends our cooperation to a strategic partnership," commented Bill Burke, Chief Maritime Officer for Carnival Corporation. "With Wartsila maintaining vessels under our agreement and ensuring a high level of safety and reliability, we can concentrate on our core priority - providing great cruise vacations for our more than 11 million annual guests. In addition to reducing our costs, the long-term agreement increases safety and operational efficiency - two critical advantages in the fast-growing cruise market."

The long-term performance-based agreement model is designed to provide predictability of costs and incentives for both companies as remuneration is based on how the equipment performs, with the companies sharing exposure based on outcomes. Wartsila believes the strategic partnership encourages increased focus on research and development, manufacturing and other functions to make its products even better and more efficient.

"We are very excited to develop our long-term partnership into a more strategic direction. Both Wartsila and Carnival Corporation are committed to investing significantly in this partnership as well as to develop our cooperation in the long run. We are confident that working closely together, we can improve performance in both organisations," remarked Pierpaolo Barbone, President, Services & Executive Vice President, Wartsila Corporation.

Wartsila stresses that further improvements in energy efficiency will be a significant focus area within the agreement and a key driver for the cooperation between the two firms. Engine efficiency and fuel consumption are to be measured on a regular basis, with improvements to fuel efficiency based on continuous monitoring and data analysis.






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