Carnival profits lower as fuel up

Carnival will develop "aggressive pricing strategies"

Carnival, the world's biggest cruise firm, has seen profits fall in the second quarter amid rising fuel costs and lower demand for Caribbean cruises.

The firm saw net income at $380m (£205m), compared to $388m a year earlier.

While year-on-year revenues rose by 6%, fuel costs rose by 43% in the same period, the firm said.

The rise in energy prices reduced earnings by $74m, the firm's chief executive officer Micky Arison said.

As the firm faces reduced demand for cruises in the Caribbean, especially for cruises lasting between three and five days, it is planning to increase bookings with "aggressive pricing strategies".

The firm, which has 80 cruise ships which contain 141,000 berths, has expansion plans which include targeting Europe.

However, rising fuel costs and cheaper Caribbean cruises mean Carnival's net revenue yields, which track the net income per passenger, will rise by only 1% or 2% for the latter half of 2006.