The 114,500-tonne Costa Fascinosa, built by state-owned shipyard Fincantieri, has space for 3,500 passengers. An even bigger vessel, with 5,000 berths, should be ready in 2014 for a company that says bookings have recovered from the crisis.

"We can't ignore the January accident. It hit us hard. We are working on safety issues," Costa CEO and Chairman Pier Luigi Foschi told reporters in a spacious bar onboard the Fascinosa with a view over Venice's lagoon.

In January, the Costa Concordia hit a reef near the island of Giglio off the Tuscan coast, capsizing and killing at least 30 people in an accident investigators say was caused when its captain Francesco Schettino took the ship too close to shore.

The accident rocked the cruise liner industry, hitting bookings and raising concerns about the safety of the huge modern cruise ships that ply the seas with thousands of passengers aboard.

For Costa Crociere, which last year carried 2.3 million passengers, it could hardly have come at a worse time, with the global economic crisis already making potential cruise customers nervous about their jobs and finances.

The company actually stopped marketing for a period but now says customers are flowing back.

"Despite the economic downturn and the impact on consumption Costa has bounced back and booking volumes are back to the same levels recorded this time last year," Foschi said.

Costa has promised to introduce a real-time route-monitoring system, which will be later adopted by parent group Carnival Corporation & Plc (CCL.L), and a system to increase sharing of the ship's navigation plan between the captain and the officers.

"We do not want to radically change the responsibilities of the captain but simply allow other officers to give opinions," Foschi said.

Some of the Concordia officers have said they raised the alarm day but that Schettino dismissed the scale of the danger.

SIZE COUNTS

The Costa Fascinosa, which will make its inaugural cruise on May 11, is a floating city with a shopping centre, five restaurants, 13 bars, casino rooms and more.

Carnival brushed off concerns that liners have grown too big, saying it is giving customers what they want.

"It's true some people go for smaller ships for premium and luxury cruises but the bigger liners create additional amenities and they are the preference. They're here to stay for quite some time," Carnival's Chief Operating Officer Howard Frank said.

Protesters in Venice, where the Fascinosa was built, have called for large vessels to be banned from sailing in the Lagoon waters in front of St. Mark's square because of the environmental damage they cause.

There are also concerns of damage to tourism in Giglio where the Concordia will lie for some time. The company says the ship can be towed away in nine months.

Carnival says the cruise industry is something of a lifeline for Italy's flagging labour market, not just for the tourists it brings but for the shipbuilding industry too.

"In the last 23-24 years Carnival has invested some $24 billion in building ships in Italy, I think that's the largest investment made in the country by any one company," Frank said.

Carnival has five new ships being built by Fincantieri.

(Editing by Robin Pomeroy)

• A Permanent Economic Emergency