American Classic American Classic Voyages Inc. filed for Chapter 11 bankruptcy protection today and said it is shutting down its Hawaii operations.
cruise line files
for bankruptcy
The Independence and the Patriot
cease operations tomorrow
when the cruises endBankruptcy not a surprise
By Russ Lynch
rlynch@starbulletin.comThe cruise company won't resume round-the-islands cruises at least until 2004, if then, and is laying off about 800 crew and other staffers from its two Hawaii ships.
Both ships skipped port calls today, leading to speculation that the operators were worried crew members would leave before tomorrow's completion of their current voyages.
The 860-passenger SS Independence had been due to dock in Nawiliwili Harbor, Kauai, this morning but took a trip along the Na Pali Coast instead. It will end its voyage tomorrow at its home port, Kahului, Maui.
The 1,212-passenger ms Patriot was due to stand off Kona today and ferry the passengers ashore for the day. The ship did not go to Kona but continued on to Honolulu where it will end its voyage tomorrow.
The company said its bookings have fallen 50 percent since the Sept. 11 terrorist attacks and cancellations are up 30 percent. The company faces "a weakened cash position with no prospects for additional capital at this time," it said.
It also stopped its mainland coastal voyages and its inland river trips except for one ship, the Delta Queen Steamboat.
American Classic said it hopes to go ahead with the construction of two ,900-passenger ships for Hawaii cruises under the $1 billion Project America plan. The company said it intends to work with Northrop Grumman Corp., which is building the ships in Mississippi, and with the U.S. Maritime Administration, which guaranteed financing.
The first ship is scheduled for delivery on Feb. 1, 2004, and the second on Feb. 1, 2005.
"The tragic events of Sept. 11 dealt a devastating blow to our business that has made it impossible to continue our full operations," Phil Calian, American Classic chief executive officer, said in the announcement.
Widespread speculation grew yesterday about possible bankruptcy, as trading was halted in American Classic's stock and crew members worried about their jobs.
Independence crew members carried personal belongings off the cruise liner at Honolulu's Pier 19 yesterday prior to the ship's 5 p.m. sailing for Kauai. They stuffed items into the trunks of cars in the parking lot.
"We're not sure what's going on," said a ship waiter. "People are piecing together little bits of information and jumping to conclusions. It's a trickle effect. People see one person carrying their things off the ship, and another person does it. It's like all the rats are following through the hole."
Warning signs that something was amiss came to the forefront this week when some of its Hawaii vendors were told not to make deliveries to the ship.
A major food-service company was told the ship was being repositioned and to hold deliveries until further advice.
Paradise Beverages, which received a fax too late to stop this week's order, said it was told to cancel delivery of its next order. The company provides beer and nonalcoholic beverages to the cruise lines.
This morning, the skipped port call caught Kauai by surprise.
Just as he does every Friday the van driver at Harbor Mall at Nawiliwili Harbor, Kauai, rolled out of the parking lot today at 8:30 a.m. bound for Pier 2, to pick up shoppers from the Independence.
All he found at the dock was water and an unobstructed view of Haupu Ridge. Dock workers at the harbor speculated the ship's owners did not want to give the crew the chance to leave the ship stranded on Kauai.
"It's certainly a blow to Kauai's economy and especially to the small businesses on Kauai," said Gary Baldwin of the Kauai Economic Development Board.
Baldwin said the ripples will extend way beyond the retail stores. Helicopter and bus tour and rental car companies that have contracts with the two ships to entertain their passengers on Kauai will lose considerable business, he said.
But the two most affected are Anchor Plaza and Harbor Mall.
"It's going to be hard on us," said Harbor Mall managing partner Greg Allen, who in the past year has spent $1.75 million refurbishing the shopping center to attract businesses that cater to the tourist trade.
Star-Bulletin reporters David Segal and Anthony Sommer contributed to this report.
