Regency Cruises has announced that it has ceased operation of its vessels for all future scheduled sailings, effective October 29. Passengers on current cruises will be accommodated with return air flights home from the port of disembarkation, according to a prepared statement.

Ronald Santangelo, President and CEO of Regency, resigned his position on October 27, having joined the company in January, 1994.

Sources close to the company, attributed Regency's collapse to "too rapid expansion" and lack of the fiscal tightness, which its fonner President and founder, William Schanz, had exercised.

Initial reports indicated that two Regency vessels - the Regent Sea and the Regent Star - were under sail when the announcement was made. At press time, the Regent Sea has interrupted its cruise and is heading to Nassau to discharge passengers. The Regent Star is underway to Piraeus where passengers will disembark on Nov. 3.

Financial Protection?

At press time, according to CLlA President James Godsman, the association is working to accumulate information about financial protection for travel agents.

Two means of limited financial protection may be available, including the Federal Maritime Commission (FMC) "non-perfonnance" bond, which is based on a percentage of unearned passenger revenues or passenger deposits, with a $15 million maximum. Another recourse might be credit cards companies' consumer protection policies for those passengers paid via charge cards.

According to Bryant Van Brakle, Director of the FMC's Bureau of Tariffs, Certificates and Licensing, Regency has posted with the FMC a guaranty for $15 million issued by Newcastle Protection and Indemnity Services in the UK. At this point, said Van Brakle, consumers could attempt to get refunds directly from Regency or contact Newcastle.

These latest developments cap a number of recent signs - including a surfacing trail of unpaid bills and cruises canceled with little notice - that the line was heading toward serious financial problems. In fact, many suppliers were expressing increasing reluctance to do business with Regency amid rumors and speculation about the line's financial problems.

The recent string of events can be traced like this:

The Rainbow was seized by U.S. marshals on Oct. 27 because of money owed to Miami-based Hallmark Food Services, a food and beverage division of Worldwide Catering which is reportedly owed $813,000. Hallmark declined to respond last week, saying, "We cannot comment on existing litigation." The move followed the breakdown of week­ long settlement talks between Hallmark and Regency.

The sudden cancellation of the Tampa sailings left some passengers, many of whom had flown in or bussed in, stranded at the pier. Regency agents offered these passengers refunds and discounts on future sailings, but didn't extend any means of returning home early.

Hallmark may have moved quickly to arrest the vessel because Regency had announced that it was moving the ship to Montego Bay to assume Panama Canal itineraries beginning Nov. 17. These sailings were originally slated for Regency's fourth acquisition in two years - Princess Cruises' Fair Princess which Regency was to rename the Regent Isle. With the move, the line's two- and five-day programs from Tampa would have been canceled until January when the Regent Sun would have moved into the berth.

Great Expectations

Regency had expected to inaugurate the Regent Isle with two Hawaii sailings beginning on Oct. 16 before the vessel started 10- and 11-day Canal programs on Nov. 3.

According to Santangelo last week, Regency was renegotiating financing tenns with the same lenders who rejected the line's original tenns. The purchase price was alleged to be $17 million. although Santangelo would not confirm it.

The Fair Princess is reportedly tied up in Mazatlan.

With the absence of the Regent Isle, the New York-based company worked last week to reposition vessels to cover the Isle's sailings which Santangelo said were "very well booked." According to published reports, Regency said it decided to move the Rainbow because more berths had been sold for the Canal programs than those originating from Tampa.

Regency also had problems with the Regent Star which hit a wall of the Gatun Locks while transiting the Panama Canal earlier this month. According to industry sources, the ship underwent emergency repairs for an 8- foot x 20-foot tear in its hull about three feet above the water line, interrupting the voyage for almost two days and arriving in Fort Lauderdale a day late.

Uphill Battle

This year the cruise industry has suffered a number of mishaps, including engine room fires, groundings, and food poisoning to the recent series of hurricanes that caused ships to divert from hard-hit ports, which in some cases angered passengers.

Now with the abrupt folding of Regency which could not only leave the line's suppliers with unpaid bills, but may leave thousands of agents and consumers out in the cold possibly for millions of dollars, the industry has a steep uphill public relations battle to contend with.