It is now confirmed that American Classic Voyages (AMCV) is in discussions with Norwegian Cruise Line (NCL) regarding the potential charter or sale of the 1998-built, 42,000-ton, 1,504-passenger Norwegian Sea as the interim vessel to be reflagged U.S. and placed in Hawaiian service in 2000. But it was not clear at press time how far those talks had progressed, how far apart the two sides were on price, and how serious NCL was about parting with another ship and actually decreasing its capacity during 2000, at a time when it is seeking to maintain and hopefully even increase its capacity. Further, the Norwegian Sea is only one of a small circle of ships AMCV is considering, although it is rumored to be at the top of the list.
Meanwhile, AMCV scored a major coup on Feb. 4 with the announcement that Carnival Corporation marketing executive and cruise veteran Rod McLeod will come aboard as president and CEO of AMCV's "Project America" initiative. The announcement gave the once skeptically viewed U.S. flag expansion plan an instant hike in credibility.
AMCV President Phil Calian declined to name the company that McLeod will be president of, but it is expected that the official name of AMCV's new mass market line will stress "American-ness" versus "Hawaiian-ness," and will remain distinct from the existing American Hawaii Cruises brand.
Both Calian and a Carnival spokesperson denied there was anything more significant brewing between the two companies, despite growing speculation that Carnival and its former synergy guru McLeod will be working together again someday. According to a Carnival spokesperson, "Carnival has talks with many different cruise organizations, and we have talked about potential business opportunities with AMCV in the past. We believe they (AMCV) have talked to all the major cruise lines," she said, asserting, "We don't have anything planned with them now."
While the existence of talks between AMCV and NCL regarding the Norwegian Sea have been confirmed by a high-level source with knowledge of the discussions, there is no certainty these negotiations will lead to a deal. NCL is maintaining its 2000 capacity with the launch of the Norwegian Sky and the stretching of the Norwegian Majesty to offset the dropping of the Leeward and Norwegian Dynasty charters this fall - but it would reportedly take a high price to convince NCL to part with the Sea and accept a capacity decrease next year.
Yet another factor in the equation is the success the Norwegian Sea is currently enjoying in Houston, a homeport NCL pioneered, where it retains an exclusive-use agreement through May. During its first nine cruises there, the Sea carried 12,332 passengers, which translates into an occupancy of 91 percent, according to a spokesperson for the port of Houston.
So why would NCL consider dropping its 2000 capacity? The answer appears to be: Anything makes sense if the price is right.
Another consideration is that NCL is continually rumored to be the subject of takeover talks by potential suitors including P&O and Carnival.
If such talks ever pan out, a new parent company could conceivably get NCL's newbuilding program back on track and give it greater flexibility in terms of short-term expansion, thus allowing more leeway for deals such as that being considered for the Norwegian Sea.
Other recent developments at AMCV involve its two major newbuilding contracts. Reports have surfaced that the $1.047 billion contract with Ingalls Shipbuilding for the two 71,000-ton, 1,900-passenger newbuildings was ostensibly a "done deal," with an official announcement slated for March 9 (it is also expected that the name of the new line and other details will be announced then). But Calian asserted on Feb. 10: "A contract has not been signed. We would have to publicly disclose that." Of the deal's status, he would only say, "We are moving forward."
Also pending was the announcement of the newbuilding order for Delta Queen Coastal Cruises; the front-running yard among insiders at press time was Atlantic Marine. Delta Queen President Scott Young said a letter of intent should be signed with one of the three contending yards the week of Feb. 15, with a firm contract in place by March 1.