Queen of the Sea

The old Queen reigned for 31 years, crossing the Atlantic 1,001 times, three of them carrying Winston Churchill. During World War II, she gave up her old rich crowd to carry servicemen and their families. She was much beloved. So last week, when Queen Elizabeth II stood in blustery winds on a pier in Southampton, England, and released a bottle of champagne against the bow of the dowager's heir to christen her the Queen Mary 2, the new vessel, the largest cruise ship ever built, had a huge legacy to live up to.

She's certainly big enough for the job. Taller than Notre Dame cathedral and designed to cruise the North Atlantic at a zippy 30 m.p.h., the 151,400 gross-ton ship cost $800 million and will tower over every port where it docks. But as more than 2,600 paying passengers, served by almost half as many crew members, sail to Florida for more celebrations this week, one question was going through many minds: Is this a ship of fools?

The cruise business has been experiencing choppy waters over the past few years. U.S. cruise lines have launched 50 new ships since 2000, with 12 more scheduled to be completed this year. The resulting glut in a time of recession has forced operators to slash prices to fill berths. Add in the facts that the QM2 is making her maiden voyage at a time when terrorists can punch a hole in a U.S. destroyer with a rubber raft full of explosives (as they did to the U.S.S. Cole in 2000), Americans are still skittish about foreign travel, and a traveler can fly between London and New York City in six hours for $300--one has to wonder if there will be enough customers to make the same journey in six days, at prices starting at $1,499 and heading north of $25,000.

Micky Arison thinks so. Arison is CEO of Carnival Corp., the cruise-industry behemoth that bought the venerable but floundering Cunard Line, which operates the QM2. "The concept of the Queen Mary was the reason for the acquisition," Arison says. Plans to build the big liner were announced within months of Carnival's 1998 takeover of Cunard, and Arison believes he can make $120 million from the QM2 "in a good year."

Cunard's famous flagship, the QE2, had a steady business crossing the Atlantic but has aged, as have its passengers. Carnival, on the other hand, made its reputation (and Arison a fortune estimated at $4.4 billion by Forbes magazine) by attracting younger passengers onto modern, glitzy ships, where the casinos start at 8 a.m., the discos are hopping until the wee hours, but the library opens for only an hour a day. Arison is hoping that Carnival's mass-market formula can be adapted from short cruises in warm climates to the sterner waters of the North Atlantic without destroying the romantic aura of transatlantic crossings.