Bearing Failure Sidelines Cruise Ship Again(pic)

An embarrassingly long string of bearing failures got longer this week as Celebrity Cruises (a division of Royal Caribbean Cruises Ltd.) was forced to cancel yet another important cruise due to a ship's propulsion system bearing failure. The company's Millennium-class ship, Infinity, is heading to emergency dry dock as its scheduled Hawaii cruise is cancelled. One observer called this the latest in, "the never-ending story of disaster," involving the Millennium-class ships' Rolls-Royce Mermaid pod propulsion systems. Two weeks ago, Infinity's on-board electronic condition monitoring system identified premature wear and second-order vibration in the starboard pod drive thrust bearing. The ship was restricted to a 16-knot top speed in an effort to keep the wear and resulting lubricant contamination under control. Dry dock is required in order to pull the propellers/impellers and replace the bearings, an extensive repair. Service is all that much more difficult due to the scarcity of dry dock space large enough to handle a ship of Infinity's size, and problems scheduling that dry dock space on short notice. The Infinity's Rolls Royce Mermaid pod drive system involves on-board diesel generators providing power to massive electric motors mounted in rotating pods under the ship. Those pods drive large propellers and can swing through a wide angle, making the ship highly maneuverable. Cancelled cruises are extremely expensive for cruise lines. In this case, canceling a 10-night cruise, from Ensenada, Mexico, to Honolulu, Hawaii, entitles each guest to a full refund, plus a free 10-night cruise. In addition, travel agents keep their full commissions, plus $50. All together, this one bearing failure alone is expected to cost Royal Caribbean at lest $0.04 per share in second quarter 2005. Infinity has a problem history of at least nine cruises cancelled due to failures in its Mermaid pod drive systems and bearings. Early on, the Mermaid pods were retrofitted with a redesigned bearing -- which Rolls Royce believed would be substantial enough to survive. In service, however, the new design bearings are no less likely to fail. • Multiple drive bearing failures sidelining new cruise ships • More cruise ship prop shaft bearing failures. • Cruise ship out of service for bearing failures. This bearing failure also marks the fifth time Infinity has been taken out of service, and the third bearing failure within the past year. In 2004, the company was forced to cancel two important Panama Canal cruises, on March 28 and April 11, for the same thrust bearing failures. In 2003, Celebrity canceled two Infinity cruises to Hawaii, February 2 and February 13, to replace failed pod drive thrust bearings in dry dock. In April 2002, Infinity dry docked to repair a pod drive bearing failure, and two cruises were cancelled. Infinity's first pod drive bearing failure occurred in June 2001, when Royal Caribbean cancelled Infinity's two Alaska cruises. Infinity was launched in late 2000, although it was delivered late due to development issues and rumors of early problems with vibration and bearing-related issues in the Mermaid system. In August 2004, Celebrity filed a $300 million lawsuit against the Mermaid's creators, Rolls-Royce and Alstom SA, in an effort to recover damages due to lost revenue and service costs. The suit, filed in Florida, is pending. In its suit, Celebrity says the Mermaid pods, "failed repeatedly, resulting in cancelled cruises and thousands of disappointed guests. These recurring failures cost the company hundreds of millions of dollars, for which the lawsuit seeks restitution." The suit further alleges Rolls-Royce and Alstom, "deceptively and fraudulently marketed" the Mermaid system. Infinity is scheduled to return to service on April 6.