Emphasizing long-range optimism about its American-flag component, NCL Corporation—parent company of SIU-contracted NCL America—on April 10 announced the temporary withdrawal of the Seafarers-crewed Pride of Hawaii from the Hawaii market effective February 2008. The ship will be deployed to Europe for the summer of 2008 as part of Norwegian Cruise Line’s foreign fleet, in an effort to offset financial losses.While the move is a setback to the U.S. fleet and to NCL America’s contracted unions (the SIU, the Seafarers Entertainment and Allied Trades Union, and the Marine Engineers’ Beneficial Association), the company stressed its continued commitment to its other American-flag vessels—Pride of Aloha and Pride of America—along with plans to return the Pride of Hawaii to U.S. registry.
For crew members, the news certainly wasn’t all bad. During shipboard meetings April 10 in Hawaii conducted by union officials and company executives, Pride of Hawaii mariners were assured that continued employment opportunities will be available aboard the two remaining U.S.-flag ships as well as (for those interested) on the rest of the NCL fleet. They also were informed that the unions and NCL America have agreed to “stay-on bonuses” for crew members aboard the Pride of Hawaii on or before April 10 (and also for eligible mariners on leave or vacation at that time).
NCL President and CEO Colin Veitch said of the withdrawal, “We take this action with regret, but sure in the knowledge that a temporary retrenchment is the right thing to do for the good of the business and the good of Hawaii in the long run. We remain committed to building a strong U.S.-flag cruise business home ported in Hawaii, and we need to make sure that our other two ships are able to achieve acceptable profitability before we can confidently reintroduce Pride of Hawaii.”
In a news release, the company pointed to its “substantial” monetary losses in 2006 (reported earlier this year) which “have been caused by downward pricing pressure in the Hawaii market following the addition of Pride of Hawaii to the fleet last summer, and the steep increase in the amount of foreign-flag competition entering the Hawaii market from the West Coast.”
According to Veitch, NCL America has grown very quickly over three years, and its competitors have also surged, starting in 2006. “Clearly we are victims of our own success,” Veitch stated. “We have demonstrated that Hawaii is a highly attractive cruise destination and Hawaii now has four times as much capacity serving it in 2007 as it did in 2004 when we started NCL America.
“We are now very hopeful that this latest measure will make the critical difference in ensuring the success of this important venture. We continue to have a vision of a strong domestic cruise industry in Hawaii and firmly believe that the combination of steps we have now taken will result in a strong NCL America delivering the best cruise itinerary anywhere in the world with the very highest standard of service at sea,” Veitch concluded.
U.S. Senator Daniel Inouye (D-Hawaii), a key figure in the rebirth of the deep sea U.S.-flag cruise industry, said, “I am proud of the great strides made, through the robust growth of a cruise ship sector, to further diversify Hawaii’s tourism industry, making our island state the fastest growing domestic cruise destination in North America. Since NCL America’s entrance into the market in 2004, Hawaii’s cruise capacity has quadrupled. There is no doubt that I am disappointed with NCL’s announcement to temporarily withdraw the Pride of Hawaii from Hawaii waters. It was a very difficult decision that President and CEO Colin Veitch had to make for the good of the overall company as he and his corporate team work to further grow demand in the Hawaii market. I respect his decision and look forward to the day that we will be able to welcome the Pride of Hawaii back to Hawaii’s shores, hopefully in the not too distant future.”
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