P&O Princess has revealed the cruise industry is recovering quicker than expected after the events of September 11, posting pre-tax profits for the first quarter of 2002 that show an increase of 43 per cent.

'Given the disruption to our bookings,' said Peter Ratcliffe, P&O Princess Cruises CEO, 'this is an excellent result, which demonstrate the inherent resilience of our industry, and the strength of our business.'

Pace of bookings for Princess Cruises is above 2001 levels and despite an eight per cent fall in prices, current pricing is almost back to last year's levels.

Underlying costs were 11 per cent lower than in the first quarter last year as a result of cost reduction initiatives taken in 2001, offsetting the subsequent price drop.

The group is currently involved in a merger with Royal Caribbean and a hostile takeover bid by Carnival, both of whom are its larger US rivals. The proposals are currently under review by regulatory authorities but have not affected the group's plans to launch its new brand Ocean Village, aimed at the younger market, in June. Details: Tel: +44 (0)20 7805 1200