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First we witnessed trouble for the Hawaii Superferry (which is back in service) now Hawaii’s largest source of jobs for US mariners, Norwegian Cruise Lines, is pulling another ship out of the state. The Mercury News tells us;
Last week, NCL announced it will pull the Pride of Aloha, the ship that launched its Hawaii itinerary in 2004, effective May 11.
Earlier this month, NCL’s Pride of Hawaii made its final sailing before being deployed to Europe, a move announced last April. It will be renamed Norwegian Jade.
NCL officials insist they remain committed to the Hawaiian market - Pride of America sailings were recently put on sale through 2010 - but filling three ships consistently for seven-day sailings was too difficult in a competitive field.
Andy Stuart, the line’s executive vice president of marketing, called the move “an extremely difficult but necessary commercial decision.” He also acknowledged that NCL’s costs were considerably higher because its U.S.-flagged ships must be filled by a U.S. workforce. Foreign-flagged ships typically pay their crews lower wages. Continue Reading…
Captain John Konrad is co-founder of Unofficial Networks and Editor In Chief of this blog. He is a USCG licensed Master Mariner of Unlimited Tonnage and, since graduating from SUNY Maritime College, has sailed a variety of ships from ports around the world.
He currently lives in Morro Bay, California with his wife and two children.
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2 responses so far ↓
1 Karen Chun // Feb 19, 2008 at 10:37 am
Before NCL there was America Hawaii Cruises (with a same VP as Superferry) who got a big MARAD loan to build 3 ships (like Superferry) and went bankrupt (like Superferry?)
MARAD loans are supposed to support American shipbuilding and shipping companies — not foreign.
A deal was brokered whereby NCL would create an American company, take over the MARAD loans and finish building the ships (I think not even in the US). In return they got discounted dock fees and other perks.
I wouldn’t be surprised if there was a clause saying they had to operate in the US for X amount of time and that time is up. Which is why they are taking their American-taxpayer funded ships and leaving. (To clarify the Taxpayers guaranteed their loan but didn’t fund them although I think the whole deal lost us a lot of money what with the default and subsequent deal)
Now NCL reflags their ships in the Bahamas, quits paying even US miniumum wage to their people and takes them elsewhere.
This is not a bad thing because cruise ships cause a lot of problems and bring tourists who spend very little on the island compared to tourists who fly in (source Hawaii Tourism Board). In the end they are harder on our island’s infrastructure than the small amount of money that actually comes back to the island (despite all the VERY SUSPICIOUS claims they make)
But it does point out what a bad program the MARAD loan program is and how it is gouging the U.S. taxpayers to shore up one or two businesses that are so financially unsound that they couldn’t get a regular loan. (like the Superferry)
Hawaii should follow the lead of Scandanavia and start charging $400 per head instead of a measely $1.50 that doesn’t even cover the security costs we incur. Then we’ll see whether the cruise ships can be profitable to our islands.
2 Karen Chun // Feb 19, 2008 at 10:37 am
Before NCL there was America Hawaii Cruises (with a same VP as Superferry) who got a big MARAD loan to build 3 ships (like Superferry) and went bankrupt (like Superferry?)
MARAD loans are supposed to support American shipbuilding and shipping companies — not foreign.
A deal was brokered whereby NCL would create an American company, take over the MARAD loans and finish building the ships (I think not even in the US). In return they got discounted dock fees and other perks.
I wouldn’t be surprised if there was a clause saying they had to operate in the US for X amount of time and that time is up. Which is why they are taking their American-taxpayer funded ships and leaving. (To clarify the Taxpayers guaranteed their loan but didn’t fund them although I think the whole deal lost us a lot of money what with the default and subsequent deal)
Now NCL reflags their ships in the Bahamas, quits paying even US miniumum wage to their people and takes them elsewhere.
This is not a bad thing because cruise ships cause a lot of problems and bring tourists who spend very little on the island compared to tourists who fly in (source Hawaii Tourism Board). In the end they are harder on our island’s infrastructure than the small amount of money that actually comes back to the island (despite all the VERY SUSPICIOUS claims they make)
But it does point out what a bad program the MARAD loan program is and how it is gouging the U.S. taxpayers to shore up one or two businesses that are so financially unsound that they couldn’t get a regular loan. (like the Superferry)
Hawaii should follow the lead of Scandanavia and start charging $400 per head instead of a measely $1.50 that doesn’t even cover the security costs we incur. Then we’ll see whether the cruise ships can be profitable to our islands.
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