Tuesday, March 9, 1999

Cruise line
signs pact for
isle ships

The contract gives a boost
to Hawaii tourism and the U.S.
shipbuilding industry

By Russ Lynch


American Classic Voyages Co. today formalized the biggest investment in Hawaii tourism in years by signing a contract with a Mississippi shipyard to build two ships for its American Hawaii Cruises subsidiary.

The first ship, costing more than $400 million, will be in service early in 2003, carrying up to 1,900 passengers in round-the-islands cruises. The contract, with the Ingalls Shipbuilding unit of Woodland Hills, Calif.-based Litton Industries Inc., calls for two ships initially, at a total cost of $850 million. The agreement could produce as much as $1.4 billion in reve-nues for Ingalls if an option to build a third ship is exercised.

"I truly believe that this is a marriage made in heaven," Sen. Trent Lott (R-Miss.) told a news conference in Washington today. The Senate Majority Leader said the combination of a 1997 law pushed by Hawaii Sen. Daniel K. Inouye and the work of American Classic and the Ingalls yard in Pascagoula, Miss., will create the first large cruise ships built in America in more than 40 years.

Lott, coincidentally, played the tuba with a high school band at the launching of the last U.S.-built cruise ship at the same yard in 1958.

Lott said having the ships built in America will facilitate the transfer of ship construction to the United States, bringing back work that for decades has been done by foreign shipbuilders.

The ship contract ushers in a new era, Inouye told the news conference at the U.S. Senate, made available to news media in Hawaii and elsewhere by a telephone hookup.

The Hawaii Democrat, a longtime member of the Senate Armed Services Committee, said the increase in U.S. shipbuilding capacity is good for the country.

"The Department of Defense supports this because we will revitalize the shipbuilding industry," Inouye said.

That in turn will bring down the cost of building ships in the United States, he told the news conference, which was also attended by Rep. Neil Abercrombie (D-Hawaii) and Secretary of the Navy Richard Danzig, among other federal officials.

The 1997 law broke new ground by guaranteeing American Hawaii Cruises a 20-year, cruise-ship monopoly in Hawaiian waters and allowing it to use a foreign vessel in Hawaii while the new U.S. ships are being built.

Officials of American Classic Voyages and the Hawaii subsidiary told a recent Star-Bulletin editorial board meeting that the companies have several foreign-built cruise ships in mind and would acquire one soon after the shipbuilding contract was signed.

Meanwhile, the 1,021-passenger SS Independence will stay on the job. In fact, the Independence is likely to be around for a while even after the two new ships and the foreign ship are all in service, company officials said.

That will give the cruise line the capacity to carry several hundred thousand passengers a year, they said.

Today's announcements included details of the two new ships, to go into service in 2003 and 2004 respectively.

They will be luxury cruise ships of about 72,000 gross tons each and 840 feet long. Each vessel will feature a four-deck-high atrium, a 1,060-seat dining room, an 840-seat theater, a 590-seat cabaret lounge and a Hawaii-style outdoor performance stage.

Passengers will be housed in 950 cabins, of which 77 percent will have an ocean view and 64 percent will have private balconies.

The ships will each have 85,850 square feet of deck space and 2,100 square feet of conference space, plus health spa and gymnasium facilities.

Tom Carman, American Hawaii Cruises' executive vice president for Honolulu operations, told the Star-Bulletin recently that the shipping line has no plans to introduce gambling on the ships, but could do so if it was legalized.

The company is "neutral" on gambling, Carman said, and the attitude of the State of Hawaii would have to change to a clear statement of support before gambling would be introduced, he said.

"We will have a public space where we could add gaming," Carman said.

"We're taking a hard look at these vessels" with that in mind, in case Hawaii should favor offshore gambling, he added.

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