As the deadline nears for Peter Deilmann Cruises' parent company to submit an insolvency plan to creditors, the company asserts that the global economic crisis, not growing competition, pushed its river cruise operation into bankruptcy.
"We did not lose group and charter business to our competitors," Gisa and Hedda Deilmann said in a statement. "Group bookings and charters were not realized due to the worldwide financial crisis. Operators of luxury niche products were the first to suffer from the consequences of the worldwide economic downturn."
Gisa and Hedda Deilmann, daughters of company founder Peter Deilmann, own and run Peter Deilmann Reederei, parent company of Peter Deilmann Cruises. They must present an insolvency plan to creditors on Nov. 3.
Deilmann’s river cruise operation was declared insolvent on June 24 due to declining passenger numbers, according to a news release describing the insolvency proceedings, which opened on Sept. 1 in Germany. (The release, issued in German, was translated for Travel Weekly by a Deilmann representative.)
Following the announcement in June, there was widespread speculation that increased competition, plus the challenge of catering to German- and English-speaking passengers, contributed to the river cruise business' demise.
Deilmann has secured financing to run river cruises through the end of the 2009 season. Until the end of August, Deilmann had been receiving government support, but now it must pay employee salaries on its own through the remainder of the season, the release stated.
Deilmann's ocean cruise ship, the Deutschland, has not been affected by the insolvency proceedings. "Deilmann will remain in the cruising business with MS Deutschland and will focus in the near future on another ocean-going vessel," the Deilmann sisters said in a statement.
A structured bidding process for the sale of the river cruise vessels is under way.
"At present, potential buyers have made their offers," the Deilmann sisters said. "The Mozart is still an outstanding river vessel and in excellent condition. Its size and interior as well as its good reputation will allow any future operator to benefit from it. Also, the rest of the fleet, such as the Heidelberg and Casanova, represent outstanding design and luxurious interiors."
Deilmann has been in the European river cruise business since 1983. It owns and operates eight river ships.