Star Cruises, half-owner of NCL Corp., which this month pulled "Pride of Hawaii" out of island service, has reduced its losses. Above, the ship as it left the shipyard in March 2006.
Cruise operator cuts losses
Star Cruises Ltd., Asia's biggest cruise operator and 50 percent owner of Miami-based NCL Corp., reported that its fourth-quarter losses narrowed due to more ticket sales at prices high enough to cover rising fuel costs.
The Hong Kong-based company's net loss was $123.5 million, or 1.66 cents per share, compared with a loss of $147.6 million, or 2.58 cents, a year earlier, Star Cruises said in a stock exchange filing yesterday. Sales gained 13 percent to $620.6 million.
The company, whose U.S. unit has reduced its Hawaii operations from three ships to one this year, said that it boosted fourth-quarter capacity 8.5 percent by adding two more ships elsewhere, and also raised fares to help cover a 47 percent increase in its fuel bill.
Star Cruises operates the Star Cruises, Norwegian Cruise and Oriental Lines ship brands. The company, which makes most of its revenues from North America, is controlled by Malaysia's Genting Group and is still half owner of struggling NCL.
Last August, Star sold a stake in NCL to private equity firm Apollo Management LP for $1 billion, saying it expected to decide by mid-2008 whether the Hawaii operations were viable.
Blaming a surge in foreign-flagged competition in Hawaii for widening losses, NCL pulled Pride of Hawaii out of island service in February to reposition the ship in Europe. Pride of Hawaii had barely left Oahu when the company announced that it would cut its fleet further by transferring Pride of Aloha to Star Cruises, which will deploy it in Asia this summer.
Colin Veitch, NCL's president and chief executive officer, said the company's remaining Hawaii-based ship, Pride of America, "is generating an encouraging profit now."
The company continues to push for a modification of the federal cabotage law that would place increased restrictions on foreign-flag vessels' cruises to Hawaii.
"In due course, we would then expect, and hope, to be able to grow our U.S. flag business back to two profitable ships by reintroducing Pride of Hawaii," Veitch said.