Cruise firm posts
$4.4 mil loss

American Classic Voyages
said business from Super Bowl XXXI
last year distorts comparisons

By Russ Lynch
Star-Bulletin

American Classic Voyages Co. today reported a loss of $4.4 million for the first quarter of 1998, more than double the $2 million loss it experienced in the first quarter of last year, but said the results were in line with its expectations.

The parent of American Hawaii Cruises and Delta Queen Steamboat Co. said one reason for the drop was the presence last year of extra business from three river boat charters connected with Super Bowl XXXI in New Orleans in January.

Other factors were higher marketing expenses this year and new costs in planning for fleet expansion in both the Hawaii and mainland operations, said Philip C. Calian, chief executive officer of the Chicago-based company.

First-quarter revenues were $40.7 million this year, up slightly from $40.4 million in 1997.

While the company is still seeking a ship, probably foreign-built, to replace the S.S. Constitution in the Hawaii round-the-islands market, it is also moving ahead with plans to build two new vessels in the United States for Hawaii and to build new U.S.-flag coastal cruising ships to travel up and down the East, West and Gulf coasts.

American Hawaii Cruises has special congressional permission to use a foreign-flag ship in Hawaii, to add to its U.S.-built S.S. Independence, providing it builds new American ships. Early last month, the parent company started a design competition for two ships for Hawaii, one for delivery in 2003 and the other for 2005.

First-quarter expenses in 1998 included $400,000 in planning costs related to the Hawaii and mainland fleet expansions. That was nearly balanced by a $300,000 one-time profit from the sale of a hotel. Calian said the company spent $1 million more on marketing in the latest quarter than it did in the year-earlier period.

The company said American Hawaii Cruises is 85 percent booked for 1998 at an average rate of $207 per passenger per night and Delta Queen, which runs paddle-wheel steamboat cruises on U.S. inland waterways, is 69 percent booked at $283 per passenger per night.