Travel Weekly's Cruise E-Letter: October 23, 2001

AMERICAN CLASSIC VOYAGES, the largest U.S.-flag cruise operator, filed for Chapter 11 reorganization Oct. 19 in the U.S. bankruptcy court in Wilmington, Del. AMCV is the second cruise line to file for bankruptcy in the wake of the attacks. "[The terrorist attacks] dealt a devastating blow to our business that has made it impossible to continue our full operations," said Phil Calian, CEO. AMCV's Hawaii-based ships, the 1,214-passenger Patriot and 798-passenger Independence, and four of the company's five steamboats will cease operations at the end of their current sailings. The 75-year-old Delta Queen, a National Historic Landmark, will continue its published schedule. Calian said the company hopes to resume Mississippi Queen's service next spring. AMCV also will work with Northrup Gruman Corp. and the U.S. Maritime Administration to continue construction of two 1,900-passenger "Project America" ships, scheduled for completion in 2004 and 2005.

CARNIVAL CORP. is in talks with AMCV's management to determine the future of the Patriot, on which a Carnival subsidiary holds an approximate $80 million first preferred ship mortgage. AMCV acquired the vessel from Carnival's Holland America Line brand in Oct. 2000 for approximately $114.5 million. Carnival had recently renegotiated the terms of the mortgage on the ship to defer principal payments "in the hope that doing so would enable the ship to continue operating," according to the statement. Carnival officials have not determined how the Patriot will be used if it returns to the company.

MEANWHILE, Holland America Line and Royal Caribbean Cruises Ltd.'s Celebrity Cruises and Royal Caribbean Int'l brands are all offering special rates and other incentives to would-be vacationers booked on canceled departures of American Classic Voyages. HAL, along with small-ship sister line Windstar Cruises, is offering special rates on a variety of cruises, ranging from $359 per person for seven-day Caribbean cruises to $1,699 for 5-day Hawaii cruises to AMCV passengers with deposits or full payments on any AMCV voyage. The fares are commissionable to agents and the offer applies to sailings departing between Oct. 21 and Jan. 4. Royal Caribbean and Celebrity, meanwhile, are offering passengers previously booked on a future AMCV sailing onboard credits of $25 per first and second passenger for cruises of two to five nights, $50 for six to nine nights and $75 for cruises of 10 nights or more.

HOLLAND AMERICA LINE will take delivery of its newest ship, 85,000-ton Zuiderdam, from Italy's Fincantieri shipyard on Nov. 15, 2002 -- 45 days late -- said company officials. HAL is slated to receive four additional ships from Fincantieri between 2003 and 2005 and "discussions are ongoing regarding future delivery dates," said HAL chairman Kirk Lanterman. He did not say why Zuiderdam's delivery was delayed, nor why HAL is seeking to discuss other deliveries, although officials at Carnival Corp., HAL's parent, said they have discussed delaying deliveries in light of the business slowdown prompted by the Sept. 11 attacks.

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