Dream Cruises cutting
staff to refloat itself

Tour-boat operator Dream Cruises said yesterday it is cutting three management and eight staff jobs and reducing operating expenses so it can leave Chapter 11 bankruptcy.

The company also said Arthur "Dutch" Van Diggelen, who owns half the company, will replace former President Michael Watson, who left the company April 15. Watson owns the remaining half of the company, and the two sides are discussing a separation agreement.

"This restructuring is designed to make us a leaner, more efficient company," Van Diggelen said.

The staff jobs will be cut through attrition, the company said.

Dream Cruises, which is operated by Aquamarine (Hawaii Inc.), filed for Chapter 11 protection from creditors on March 18 after General Electric Capital Corp. had two of the company's boats seized for nonpayment on loans.

"We hope the courts will agree the 'new' Dream Cruises is a better, more focused company," Van Diggelen said. "We also hope they will allow us to regain our boats so we can resume normal business operations."

Since its vessels were seized, Dream Cruises has been contracting with other boats for its whale- and dolphin-watching tours and snorkel excursions. However, a lack of available vessels prompted the company to suspend its Kona operations and drastically reduce cruises from Kewalo Basin on Oahu. It continues to operate daily dolphin-watching tours along the Waianae Coast.

"There just aren't that many 100- to 200-passenger vessels sitting around waiting to be chartered," said Frank Alexich, who was named to oversee the company's daily operations on Oahu and the Big Island. He previously was vice president of sales and marketing.

The company's revenues were doing well before the bankruptcy, Alexich said, but costs climbed out of control and the company is now focusing on reducing expenses and fine-tuning its cruises.