NEW YORK (Bloomberg) — Carnival Corp., the world’s largest cruise operator, said it will buy a new ship for [EURO]420 million ($556.1 million) to expand capacity in Europe.Carnival will exercise an option to order a 92,700-ton cruise ship for its Italian Costa Cruises line. The ship will have 2,260 beds and be built by Fincantieri-Cantieri Navali Italiani SpA for delivery in March, 2010, Miami-based Carnival said on Tuesday in a statement.

Costa, the largest European cruise line, now has four new ships on order with a combined 10,520 beds. Carnival is adding capacity in Europe with its Costa and AIDA lines as demand in the Caribbean slows. The cruise market in Europe is projected to rise 84 percent to 5.9 million passengers by 2015, according to UK research company Ocean Shipping Consultants Ltd.

“The Caribbean has more capacity than it can handle,” said Robert LaFleur, an analyst at Susquehanna Financial Group in Stamford, Connecticut. “If you want to grow, you have to go where the growth is and that’s Europe right now.” He has a “neutral” rating on Carnival and doesn’t own any shares.

Costa will have a fleet of 15 ships when the four on order are completed.

Carnival now has 18 new ships on order that are scheduled to enter the fleet between March, 2007 and 2010, the company said.

This will increase the company’s fleet of 81 ships by 22 percent. Fincantieri, Italy’s state-owned shipbuilder, is constructing 12 of the ships.

Carnival also extended an option on a 2,044-passenger ship for its Holland America Line. The 86,000-ton ship, if built, would be ready in late 2010.

Carnival operates 12 cruise lines, including its flagship Carnival Cruise Lines, Princess Cruises and AIDA Cruises, which is geared to German-speaking travellers.