NEWS: Disney's Cruise Ship Builder Gets Government Bailout

Are there rough seas ahead for the Disney Cruise Line’s expansion?

The Disney Destiny | ©Disney

Last month at D23: The Ultimate Fan Event, Disney announced an order of four new ships for the Disney Cruise Line which, combined with several ships already under construction, will put the company’s fleet at 13 ships by 2031. However, major issues with Disney’s contracted shipbuilder may put a dent in the company’s plans.

In September of 2024, it was announced that the German government was stepping in to save shipbuilder Meyer Werft. According to EuroNews, the government is purchasing a roughly 40% stake in Meyer Werft for €200m (approximately $220 million) and also planning to provide the company with a loan guarantee worth €1bn (approximately $1.1 billion), which means that the state will cover the loan if Meyer Werft is unable to pay. The deal is subject to the approval of Germany’s lower Bundestag (parliament) as well as the European Commission.

The government German state of Lower Saxony additionally intends to match both the €1bn loan guarantee and purchase another 40% of Meyer Werft for €200m, meaning that approximately 80% of the company and the northern German shipyards in Papenburg and Rostock-Warnemünde will be under government control.

©Disney

According to EuroNews, the government is bailing out the shipbuilder because the shipyards could become important for navy shipbuilding in the event of future military action, and to save the jobs of the 3,000 people who are directly employed at the yards as well as the close to 20,000 who work at “800 mainly mid-sized suppliers that are also involved in construction.”

Meyer Werft’s financial issues stem from post-pandemic increases in the cost of raw materials, energy, and labor, none of which were accounted for in pre-pandemic contracts. Furthermore, the established economic model of the shipbuilding industry sees 80% of the construction price paid upon delivery of the completed vessel, meaning that a shipbuilder like Meyer Werft must hold cash reserves to pay for manufacturing during the construction process.

©Scott Gustin X

Meyer Werft’s relationship with Disney began with the Disney Dream and Disney Fantasy, which were delivered in 2010 and 2012 respectively. They were followed by the Disney Wish in 2022, with the Disney Treasure and Disney Destiny currently under construction and scheduled for delivery in 2024 and 2025 respectively.

At the time of the announcement of the four unnamed ships currently scheduled to be complete by 2031, Bernard Meyer said in a press release, “We are very happy to continue our partnership with Disney Cruise Line and build four additional outstanding ships over the next seven years. We now have eight ships for Disney Cruise Line in our order book which reflects the trust in our capabilities and hard work of our team.”

©Disney

Assuming these bailout deals are approved, it seems like Meyer Werft’s work on the upcoming Disney Crusie Line vessels should proceed on schedule for now. However, the fact that the company finds itself in such financial peril at all could be an ominous sign for the future. Stay tuned to DFB for further Disney Cruise Line coverage.

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