P&O Princess Cruises announces the launch of Ocean Village, a new contemporary brand for the UK, and revised ship deployments

• Ocean Village, a new contemporary UK brand to be launched in May 2003
• Transfer of Sea Princess to the UK fleet from the North American fleet in Spring 2003
• Fourth Grand class vessel, currently under construction, to be introduced to North American fleet in Spring 2004

P&O Princess Cruises today announced the launch of a new brand in the UK cruising industry and revised ship deployments which will accelerate the Group's development in the fast growing cruise segment of the UK holiday market, offer more choice to customers and enhance the position of its Princess Cruises fleet in North America.

Ocean Village

The number of cruise passengers from the UK has more than doubled since 1995, but cruises still represent a small proportion of all UK holidays. Recognising the great potential for growth in cruising within the UK, P&O Princess is creating a new brand, Ocean Village, which will target a young and active customer base, further expanding the appeal of cruising within the UK.

Initially, Ocean Village will have one ship, providing a dedicated fly-cruise product for the UK from May 2003. The ship, currently called Arcadia and part of the P&O Cruises UK fleet, will have 1,620 lower berths, eight bars, an internet cafe and a bistro endorsed by the TV chef, James Martin. She will provide a cruise experience designed for British passengers, with a relaxed contemporary atmosphere and an emphasis on informality, health and well-being. The initial summer season itineraries will offer one and two-week Mediterranean cruises, together with cruise and stay holidays, based on two alternating seven night itineraries out of Palma, Majorca.

Ship deployments

The 2,010 lower berth Sea Princess will be transferred to the P&O Cruises brand in the UK from Spring 2003. Currently part of the Princess fleet in North America, Sea Princess will be refitted to cater to British tastes and renamed Adonia. Her first season will be providing European cruises from Southampton. Together with the introduction of Oceana (currently Ocean Princess) and the withdrawal of Victoria in November 2002, these changes will give the P&O Cruises brand a fleet of four modern ships. By mid 2003, the P&O Cruises fleet will have a weighted average age of under five years and will have an average ship size of over 1,900 berths. Approximately 35% of the cabins in the fleet will have balconies.

P&O Princess also announced that the 3,100 lower berth ship currently under construction in Fincantieri and scheduled for delivery in Spring 2004, will now be delivered to the Princess fleet in North America rather than the P&O Cruises UK fleet. This ship, to be named Crown Princess, has the same basic design as the highly successful Grand Princess series with changes to the public rooms and an extra deck added to provide additional capacity. Coupled with the transfer of Sea Princess to the UK, this change moves some of Princess' capacity growth from 2003 to 2004 and represents a further modernisation of the Princess fleet. Based on current plans, by the middle of 2004 the Princess fleet will have a weighted average age of under four years and will have an average ship size of approximately 2,300 lower berths. Approximately 55% of the cabins in the fleet will have balconies.

Peter Ratcliffe, Chief Executive Officer, P&O Princess Cruises stated:

"Our existing strong global reach and modern fleet gives us the flexibility to deploy our fleet strategically. The ship deployments we have announced today will enable us to accelerate our growth in the fast growing cruise segment of the UK holiday market, further modernise our fleet within North America and provide greater choice to our customers."

Attachments:

Appendix I: P&O Princess Cruises' Ocean Cruise Capacity and Deployment

Appendix II: Group Fleet and Summary of Changes

P&O Princess

P&O Princess Cruises plc is a leading international cruise company with some of the strongest cruising brand names: Princess Cruises in North America; P&O Cruises, Swan Hellenic and Ocean Village in the UK; AIDA and A'ROSA in Germany; and P&O Cruises in Australia. It is a leading provider of cruises to Alaska, the Caribbean, Europe, the Panama Canal and other Exotic destinations. The current complement of 18 ships offering 29,460 berths is set to grow in the next three years with seven new ocean cruise ships and three river cruise vessels on order.

P&O Princess Cruises has approximately 19,500 employees worldwide and carried over one million passengers in 2001, generating a revenue of approximately $2.5 billion (approximately £1.7 billion). Headquartered in London, P&O Princess Cruises' ordinary shares are quoted on the London Stock Exchange and as ADSs on the New York Stock Exchange (under the symbol "POC").

Certain statements contained in this announcement are ''forward-looking statements'' that involve risks, uncertainties and assumptions with respect to P&O Princess Cruises and its subsidiaries, including certain statements concerning profit forecasts, working capital, future results, strategies, plans and goals and other events which have not yet occurred. These statements are intended to qualify for the safe harbours from liability provided by Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as amended, which are part of the US Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these statements by looking for words like ''will'', ''may'', ''believes'', ''expects'', ''anticipates'', ''plans'' and ''estimates'' and for similar expressions. Because forward-looking statements involve risks and uncertainties, there are many factors that could cause the statements, events or transactions described herein not to occur and/or P&O Princess Cruises', actual results, performance or achievements to differ materially from those expressed or implied in this announcement. These include, but are not limited to, economic and business conditions in general and, conditions in the cruise, travel and vacation industries in particular, including changes in industry cruise ship capacity and competition from other cruise ship operators and other vacation alternatives, safety and security concerns, incidents at sea, weather conditions, the political climate, fluctuations in interest rates, fluctuations in the price of oil, changes in the tax and regulatory regimes under which the company operates, capital expenditures, and factors impacting P&O Princess Cruises' international operations. In addition, the paragraph entitled ''Risk Factors'' in Section 5 of the EGM Circular dated 27 December 2001 and P&O Princess Cruises' Annual Report on Form 20-F for the year ended 31 December 2001 filed with the US Securities and Exchange Commission contain important cautionary statements and a discussion of many of the factors that could materially affect the accuracy of the company's forward-looking statements and/or adversely affect its respective businesses, results of operations and financial position, which statements and factors are incorporated herein by reference.

Subject to any continuing obligations under applicable law or any relevant listing rules, P&O Princess Cruises expressly disclaims any intention or obligation to disseminate, after the date of this announcement, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.

                                                                    Appendix I
 
                           P&O PRINCESS CRUISES' 
                   OCEAN CRUISE CAPACITY AND DEPLOYMENT 
 
The first table below shows our actual passenger cruise days for 2001 and our
estimated passenger cruise days for 2002 to 2005. The second table shows the
number of berths in our fleet at April 2002 and projected growth in our
geographic segments to 2005.
 
These tables take account of our current newbuild programme and announced
ship transfers, additions and withdrawals, including the changes announced
today and also the announcement of the replacement of Minerva with Minerva II
in April 2003.
 
 
 
                                                                            
    Passenger cruise days (millions)    2001    2002    2003    2004    2005
    North America                       6.20    6.79    7.16    8.75    9.17
    UK                                  2.23    2.32    3.28    3.65    3.62
    Germany                             0.59    1.06    1.79    2.21    2.49
    Australia                           0.44    0.42    0.43    0.42    0.44
                                     _______________________________________
    Total                               9.46   10.59   12.66   15.03   15.72
                                     _______________________________________
 
 
                                                                              
                  ----------------- Lower berths ---------------              
  Segment       Capacity at  Additions  Announced  Transfers Projected Average
                 April 2002           withdrawals             capacity  annual
                                                               in 2005  growth
                                                                       in pcds
                                                                           (1)
 
  North               20,860    12,380       (640)  (7,210)     25,390     10%
  America                                                                     
  United               6,210       870     (1,060)   4,030      10,050     13%
  Kingdom                                                                     
  Germany              1,190     2,540           -   3,180       6,910     43%
  Australia            1,200         -           -     -         1,200      0%
                ______________________________________________________________
  Total               29,460    15,790     (1,700)     -        43,550     14%
                ______________________________________________________________
(1) Average annual growth in passenger cruise days from 2001 to 2005        
 
 
                                                                   Appendix II
                     GROUP FLEET AND SUMMARY OF CHANGES 
 
                                                                              
Ship               Year of delivery   Lower Berths  Proposed changes   
 
Princess Cruises                                                            
 
Pacific Princess        1971                640     Sold. Transfers to new
                                                    owners in November 2002
Royal Princess          1984              1,200                     
Crown Princess          1990              1,590     Transfers to A'ROSA   
                                                    brand in  June 2002   
Regal Princess          1991              1,590     Planned to transfer to
                                                    A'ROSA brand in Q2 2004
Sun Princess            1995              2,020                     
Dawn Princess           1997              2,000                     
Grand Princess          1998              2,590                     
Sea Princess            1998              2,010     Transfers to P&O Cruises
                                                    brand in Spring 2003    
Ocean Princess          2000              2,020     Transfers to P&O Cruises
                                                    brand in October 2002  
Golden Princess         2001              2,600                     
Star Princess           2002              2,600                     
Coral Princess          2002              1,970     To be delivered in 
                                                    November 2002      
Island Princess         2003              1,970     To be delivered in Q2 2003
Diamond Princess        2003              2,670     To be delivered in Q2 2003
Sapphire Princess       2004              2,670     To be delivered in Q2 2004
Crown Princess          2004              3,100     To be delivered in Q2 2004
 
P&O Cruises                                                                
 
Victoria               1966                 700     Sold. Transfers to new 
                                                    owners in November 2002
Arcadia                1989               1,450     Transfers to Ocean Village
                                                    in May 2003
Oriana                 1995               1,830                    
Aurora                 2000               1,870                     
Oceana                 2000               2,020     Currently Ocean Princess. 
                                                    Joins P&O Cruises in 
                                                    October 2002              
Adonia                 1998               2,010     Currently Sea Princess. 
                                                    Joins P&O Cruises in 
                                                    Spring 2003        
 
Swan Hellenic                                                              
 
Minerva                1996                 360     Chartered. Charter ends in 
                                                    April 2003 
Minerva II             2001                 700     To be chartered from April
                                                    2003    
 
Ocean Village                                                              
 
Ocean Village          1989               1,620     Currently Arcadia. Joins
                                                    Ocean Village in May 2003
 
AIDA                                                                       
 
AIDAcara               1996               1,190                     
AIDAvita               2002               1,270     To be delivered in May 2002
AIDAaura               2003               1,270     To be delivered in Q2 2003 
 
A'ROSA                                                                     
 
A'ROSA BLU             1990               1,590     Currently Crown Princess. 
                                                    Joins A'ROSA in June 2002
A'ROSA unnamed         1991               1,590     Currently Regal Princess.
                                                    Planned to join A'ROSA in  
                                                    Q2 2004            
 
P&O Cruises                                                                
Australia                                                                  
 
Pacific Sky            1984               1,200  

SOURCE Princess Cruises