On 11 April 2002, the Commission decided to initiate proceedings pursuant to Article 6(1)(c) of theMerger Regulation finding that the operation raises serious doubts as to its compatibility with thecommon market in at least the national markets for the provision of oceanic cruises in the UnitedKingdom and Germany.
On 22 May 2002, the Commission communicated a Statement pursuant to Article 18 of the MergerRegulation (hereinafter: Statement of Objections) to Carnival. Carnival submitted on 18 June 2002 areply to the Statement of Objections (hereinafter: Carnival's Reply). On 3 June 2002 POPC submitteda reply to the Statement of Objections (hereinafter: POPC's Reply). Carnival and POPC bothinformed the Commission's Hearing Officer prior to 7 June 2002 that they would not exercise theirright to a formal oral hearing.
The Advisory Committee discussed the preliminary draft decision on 22 July 2002.
COMPATIBILITY WITH THE COMMON MARKET
The operation relates to the provision of oceanic cruises for vacation purposes (
). This sectiondescribes the historic development of the industry and some of its fundamental characteristics.
A.1. INDUSTRY BACKGROUND(13)
The present-day cruise industry has its roots in the conversion of transatlantic liners from a meansof transport to leisure cruising, starting in the 1960s. The cruise industry grew rapidly during the1980s, with the larger cruise companies constructing ‘megaships’, and some smaller companiesacquiring second-hand ships. Since the mid-1990s some of the large cruise companies haveconstructed ‘post-Panamax’ ships, of over 100 thousand tonnes, so-called because they are too largeto pass through the Panama Canal. In 2001, the cruise industry comprised about 230 ships world-wide, a number expected to grow to around 260 in 2003. Ships are not tied to particular regions oritineraries, may be moved around the globe, and are acquired and chartered on an internationalbasis.
The four largest cruise operators worldwide are Carnival, Royal Caribbean Cruise Line (RCCL), POPCand Star Group (including Norwegian Cruise Line Limited (NCL). In terms of fleet size, Carnival,with 43 ships, is number one, Royal Caribbean, with 23 ships, is number two and the NCL/AsianStar group and POPC each have 18 ships. Carnival currently has 12 ships on order for the end of 2004. POPC currently has five ships on order for the end of 2004. RCCL has five ships scheduledfor delivery by the end of 2004; it has the youngest fleet of any cruise line (average age about fiveyears), and the world's largest ships (Voyager, Explorer, and Adventure, each with 3 100 berths).NCL/Star has one ship on order.
In 2001, there were approximately 7 million cruise passengers from North America (72 % of worlddemand), 1,9 million (20 %) from Europe and 800 000 (8 %) from Asia. In the United States cruisinghas achieved a much higher penetration rate than in Europe (United States: 2,2 %; ContinentalWestern Europe: 0,4 %) (
In the last few years, the cruise industry has seen much higher growth rates than have other typesof vacations. Growth is forecast to continue more rapidly in Europe than in the United States, but isgenerally expected to be between 8 % and 20 %.
In the United Kingdom a significant part of this growth was accounted for by the entry into cruisingof vertically integrated tour operators, beginning in 1994//95 with Airtours, quickly followed by Thomson, and, more recently, First Choice. These companies together carried about one third of allUnited Kingdom cruise passengers in 2000.30.9.2003 L 248/3Official Journal of the European Union
) As far as POPC's German subsidiary is concerned it also related to the provision of river cruises.(
) Figure refers to number of passengers cruising per year in relation to total population. (G.P. Wild: Fleet Changes, p.56).