Thomson Cruises has signed a deal with Costa Cruises to charter the 1,506-passenger Costa Europa for the next 10 years.

The cruiseline will take delivery of the ship, to be renamed Thomson Dream, in April 2010 and it will go straight into service, sailing seven-night Western Mediterranean cruises from Palma, Majorca. The cruises go on sale on July 16.

The deal means a major increase in capacity for Thomson next year. Costa Europa dwarfs 486-passenger Calypso, which leaves the Thomson fleet at the end of this year.

TUI Travel director of cruising UK and Ireland David Selby agreed it is a big increase, but said the extra capacity is only replacing berths lost, or about to disappear, from the UK market.

Emerald left the Thomson fleet last year and Calypso goes at the end of this summer. This year, Saga and Fred Olsen Cruise Lines are each getting rid of one ship, and Ocean Village Two is going to Australia in the autumn as part of the first stage in dissolving the Ocean Village brand.

Selby said: “Thomson Dream is about replacing tonnage, not expansion. If I was not confident there was a demand for the extra capacity, I wouldn’t do it.”

However, he ruled out using the extra capacity for an immediate return to ex-UK cruising. “As we are a tour operator with an airline, it makes sense for us to concentrate on filling our aircraft by offering flycruises in the Mediterranean.”

Selby said the ship is in a lovely condition, with very new cabins. It will transfer straight from Costa to Thomson without any major alterations, although it will be adding Thomson’s smiley face logo to the funnel.

He said: “Before joining Costa it was a Holland America Line (HAL) ship so it has the same feeling of elegance and style as Thomson Celebration and Thomson Spirit, which were also HAL ships.”

He added: “It is due in dry dock in November, so we will wait until then before making any changes. It will give us a chance to see what works and what doesn’t.”