Ambassadors International is going to sell Majestic America Line, its U.S. river and coastal cruising business, the company said last week.
"We are committed to operating the 2008 season of Majestic America Line while conducting our exit of the business in an orderly and effective manner," Joe Ueberroth, chairman and CEO of Ambassadors, said in a statement. "Several credible parties have expressed a sincere interest in acquiring some and/or all the assets of Majestic America Line."
Ueberroth went on to say Ambassadors would focus on its Windstar Cruises business, a luxury yacht fleet of three masted, ocean-going ships. Diane Moore was named president of Windstar Cruises, effective immediately. Moore had been serving as executive vice president of marketing, sales, reservations, guest services and customer relations.
Ambassadors entered the cruise business in 2006, when it separately acquired the American West Steamboat Co., the Delta Queen Steamboat Co. and the river vessel the Columbia Queen to form Majestic America Line.
The decision to sell Majestic follows a series of setbacks for Ambassadors.
In October, cruise industry veteran David Giersdorf stepped down as president of Ambassadors Cruise Group, the division that oversees Majestic and Windstar. (In March, Giersdorf filed a suit against Ambassadors alleging improper termination.)
Following Giersdorf's departure, Ambassadors acknowledged the difficulties facing the Majestic line.
"As we move forward with the [Majestic America Line] business, we've had some challenges, and the focus of the company has to be more operationally oriented," Ueberroth said in an interview in November.
That same month, Ambassadors posted a third-quarter loss of $24.5 million, which it attributed to "significant losses" in the company's cruise division. Majestic reported a pretax loss of $9.4 million for the quarter, nearly double the $5 million loss reported a year earlier.
At the time of the earnings release, Ueberroth said that the Majestic business had been negatively affected by low per diems; an early layup of the Empress of the North, which ran aground during a cruise in May 2007; and high operating costs and costs associated with the transition to V. Ships, a marine management company that Ambassadors tapped in November to manage Majestic.
In addition to the grounding of the Empress, the Majestic fleet itself has encountered other setbacks in the past year.
On April 13, a fire broke out in the engine room of the Queen of the West, forcing passengers to evacuate and the cancellation of the cruise. The following cruise along the Columbia and Snake rivers was also canceled, and Majestic's Columbia Queen came out of drydock early to accommodate Queen of the West sailings starting April 20.
The Delta Queen has been embroiled in a congressional battle over whether the ship should be granted another exemption to the Safety of Life at Sea Treaty, which prohibits it from operating overnight cruises due to its wooden substructure, which is considered a fire hazard. Majestic has been marketing the 2008 Mississippi River season as the 82-year-old ship's farewell tour.
Last year, Majestic delayed the relaunch of the Mississippi Queen.
The Contessa, which launched in June and was to sail in Alaska, was laid up as of 2008; Ambassadors said the ship was operating at a loss and that it intended to sell it.
Ambassadors will announce its first-quarter 2008 results on May 6.
To contact reporter Michelle Baran, send e-mail to [email protected].