NEW YORK -- U.S.-flag operator American Classic Voyages (AMCV)
reported a 592.3% decline in second-quarter earnings, losing $7.7
million during the period ended June 30, compared with a gain of
$1.3 million for the same period in 2000. AMCV's revenues for the
quarter were $78.1 million, a 28% increase over the second quarter
In a conference call with analysts, chief executive officer
Philip Calian attributed the earnings decline to "a weak Hawaii
leisure market, poor cruise pricing and the general economic
However, Calian predicted a "marked occupancy improvement for
the second half of the year in Hawaii."
Advance bookings for the Independence and the Patriot, both
deployed year-round in Hawaii, are at 104% in the third quarter and
88% in the fourth quarter, with yields for the second half of the
year 10% to 15% higher than in the second quarter, said the AMCV
Calian expects American Hawaii Cruises' yields to be in the $115
to $120 range for the full year vs. previous estimates of $100 to
"I don't see another cruise line looking forward to that kind of
yield improvement," he said.
Yields on the company's Delta Queen river boats and coastal
vessel will average between $195 and $205 for the year, said
AMCV may seek arbitration on 'Project America'
NEW YORK -- AMCV will seek to implement binding arbitration if
ongoing discussions with Northrup Gruman/Ingalls Shipbuilding
regarding "issues affecting construction" of the two
1,900-passenger cruise ships fail to result in an agreement, said
Philip Calian, chief executive officer.
AMCV is building the ships with partial funding from U.S.
government loan guarantees.
"It was clear to us the program [widely known as "Project
America"] was running behind schedule. Northrup claimed we were
responsible for the delays," Calian told analysts during Tuesday's
conference call. "We continue to deny that we are responsible, and
we have entered into discussions with Northrup to resolve the
While work on the ships continues during the talks, Calian said
the Mississippi-based yard may have underestimated the demands of
the project after spending decades building naval vessels.
"The challenges of [Ingalls'] transition from naval work [to]
the tighter construction deadlines of commercial work are proving
very real," said Calian. "If we cannot resolve these issues, we
intend to go to binding commercial arbitration. [But] we are
hopeful that the product of these discussions will be new ships for
Hawaii. We are extremely committed."
Calian said the ships, originally slated for delivery in Jan.
2003 and Jan. 2004, are behind schedule because of difficulties in
Ingalls' "ability to fabricate and process steel, complete the
outfitting process and design requirements and coordinate these
Calian added, "They need to make a commitment to the contract
Officials at Ingalls were not immediately available for