NCL Says All Hawaii Cruises Suspended: Whoa! Is It True?
Where: Statewide || Grouped in: Statewide Any Kine || Tagged:
A mahalo to Hawaiirama contributor Bruce for telling me about the breaking drama regarding Norwegian Cruise Lines and the rumors / news that it would be suspending all Hawaii cruise operations. I did a quick Web search on the topic and could find nothing so Bruce may be hearing rumors. It does seem odd on the heels of a $1 billion cash infusion from private equity investor the Apollo Group to shore up the company's sagging balance sheets and help it dig out from what can only be called, at this point, a disastrous foray into Hawaiian waters. Bruce believes Apollo Group made the shutdown of money-losing Hawaii operations a condition of the cash infusion. It's entirely plausible and if Bruce, a respected travel agent, is hearing from NCL that all cruise sailings are suspended, then I have no reason to doubt him. I'm kinda surprised NCL has not gotten in front of the media on this one.
A bit of backstory is in order. NCL built two new ships (correct me if I'm wrong) specifically for Hawaii and was planning to ply three in island waters. But a saturated cruise market in Hawaii kept prices low and forced massive discounting. At the same time NCL, which was the only cruise line sailing in Hawaii without arriving from foreign ports, was running operations with U.S. nationals as crew, as mandated by the Jones Act. This must have raised their cost structure considerably. The islands have been a sore spot for NCL investors for some time and NCL removed one cruise ship from the islands in hopes of reducing inventory and jacking prices. They also took a political tack -- they are believed to be the force behind a request that would require longer port stays for other foreign vessels sailing to Hawaii. As it stands, cruise ships would leave San Diego or L.A., go to Ensenada, Mexico for a 30 minute port call, then cruise to Hawaii -- all legal under the Jones Act. The Federal Government just announced a possible rule change that would require foreign-flagged vessels to stay much longer for its foreign port call between U.S. port stops. This would wipe out the Hawaii market for foreign-flagged vessels. At any rate, we'll be watching this closely. It's conceivable that Apollo, as a condition of its investment, demanded that NCL shut down Hawaii. Stay tuned! And check out Bruce's podcast on the topic for more info.
Advertisers, reach Hawaii |
Comments
jeff said:
Only Pride of Hawaii was from the outset destined for NCL Hawaii (which is ironic inasmuch as it was the first ship pulled from Hawaii by NCL). Pride of America was built for American Classic Voyages, which went bankrupt. Pride of Aloha was to be a Costa ship, which went to NCL (as Norwegian Sky) following the shipbuilder’s bankruptcy.
NCL said last year that they were undecided on what to do with the Hawaii cruise market. With the elimination of one ship, I have seen cruise prices rise for the other two, but perhaps that was not enough.
It would be a real loss to have NCL pull out. There are many island jobs (albeit they on the lower end) associated with their cruises.
—01/09/08