A surprise merger announced yesterday will create the world's largest cruise ship company and mean four of the five regular ships visiting Bermuda will be operated by a single group.

Tourism Minister David Allen said he was not concerned about the proposed mega-merger of P&O Princess Cruises and Royal Caribbean Cruises Ltd, which will create a combined fleet of 41 ships.

The new group will have a market value of $6 billion and will overtake Carnival as the world market leader.

The company expects to be able to make annual savings of around $100 million at a time when the industry has been hit hard in the wake of the September 11 terrorist attacks.

Mr. Allen said he did not believe there was a danger of the new company going bust, sinking the Island's cruise ship trade.

He said last night: "There is no question of the company going belly up. It will be an enormous company with huge resources.

"Royal Caribbean and P&O were already pretty solid companies and if these companies can't make it, it will be the end of the cruise ship industry.

"I know the top people in all these companies and I expect we will continue to have a good relationship with them. They are well aware of what Bermuda needs and I don't expect any problems there.

"Anyone with that kind of economic muscle, we would be concerned if they tried to exert it, but Bermuda has always had a clear vision of its cruise ship policy, that is restrictions. They are well aware of that and we've never had any problems with them throwing their weight around."

Royal Caribbean Cruises owns regular Bermuda cruise ship the Nordic Empress, while the Horizon and Zenith are owned by Celebrity. Royal Caribbean and Celebrity have already merged, with Royal Caribbean International as the parent company.

P&O Princess Cruises owns the Pacific Princess. Bermuda's fifth regular ship, Norwegian Majesty, is owned by Norwegian Cruises and is unaffected by the merger.

Henry Hayward, the boss of the Meyer group of companies, said the merger will be good news for Bermuda because the the ships will use their marketing muscle to promote their ships and the Island.

"I would think it would be on the plus side of Bermuda being better served because of the mere fact that so many of their vessels are running here that they have got to make sure that their vessels and Bermuda are well marketed," he said.

"I was surprised to hear it, it came out of the blue, but there are many changes happening in the industry now as far as mergers are concerned.

"On the negative side, it is a concern that four out of five of the ships coming here are with one company and are not more evenly spread around."