Carnival Corporation has sold back its 49 percent interest in Epirotiki Cruise Line to Epir Holdings. Paris Katsoufis, the third partner, and President of Dolphin/Majesty Cruise Lines, who obtained a reported 18 percent share in February, has also sold his portion. The price for the combined shares was approximately $25 million.
According to Carnival Corp. Chairman and CEO, Micky Arison, "because of different strategic directions and cultural differences, it was in the best interests of both companies to separate." Adding that the move was "by mutual agreement and very amicable," Arison also noted that Carnival will realize a small gain on the transaction.
This latest move follows vehement protest by Greek seafarers unions when, in January, Carnival increased its holding to 49 percent, the maximum ownership share allowed to non-Greek nationals under Greek cabotage laws in order for ships to fly a Greek flag. At that time, Katsoufis emerged as a shareholder and as Epirotiki Chairman, prompting speculation that he was allied with Carnival. The Greek unions questioned whether Katsoufis qualified as a Greek national because he has been a long-time resident of the U.S. They also threatened to strike if special job guarantees were not extended to them by Epirotiki.
Since Carnival's "entry" into the Mediterranean via Epirotiki less than two years ago, the megacompany has indicated its intentions to restructure and modernize the Greek line. One move was to install Pamela Conover, a former Citicorp banker, as President and CEO based in Athens. In-house changes made by Conover included a new budgeting plan, computerization, and establishment of a hotel operations division under the supervision of Giora Israel, formerly Carnival's Special Projects Director.
Other changes included putting several smaller Epirotiki ships on the selling block and updating the company logo. Epirotiki also announced its first winter season of full operations aboard the World Renaissance starting in November from Israel to Jordan and Egypt.
However, early on reports indicated clashes in operating philosophy between Carnival and Epir Holdings, which represents the Potamianos family interests. The Potamianos family has owned the shipping line for four generations, dating back to 1830 when the company inaugurated.
There may also have been some operating efficiencies in agency services, bunkering and purchasing in Europe enjoyed by Holland America Line and Windstar Cruises because of the Epirotiki affiliation. In addition, Carnival may also have lost a natural customer for its older ships.
Conover and Israel are expected to join Carnival Corporation after assisting in the transition.
One can't help but speculate whether Carnival will now establish its own European operations, rather than join with another company already ensconced in the region. Previous talks between Carnival and Club Med led nowhere.