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New Milestone For SeaAmerica Project
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| Cruise Line's Agreement With U.S. Yard Will Lead To At Least Two U.S.-Flagged Ships | |||
Under the agreement, SeaAmerica and Litton Ingalls will design and negotiate the construction of two 42,000-ton luxury cruise ships at the Litton Ingalls yards in Pascagoula, Miss., and Avondale, La. The agreement includes an option for two additional ships. The SeaAmerica vessels will be manned in all licensed positions by AMO. "These U.S.-built, U.S.-crewed ships will be operated port-to-port within the U.S., targeted at the convention and business market, in addition to leisure travelers," said David W. Turner, chairman and chief executive officer of SeaAmerica Cruise Line, a growing venture based in Hollywood, Fla. Turner added: "We have advanced the development of an American cruise product and industry. We are proving that we can build in America, operate in America, and, when the time arrives, deliver a quality American product to our passengers." "This new opportunity clearly validates Litton's assessment of the growth potential of the U.S. cruise ship market," said Jerry St. Pe, chief operating officer of Litton Ship Systems and executive vice president of Litton Industries. "This program presents an opportunity to grow this segment of our company;'s business beyond the ships already under contract." In July 2000, Litton will begin construction in Pascagoula of at least two large U.S.-flag cruise ships to be operated in the Hawaiian Islands by United States Line, a unit of American Classic Voyages Inc. AMO will man those ships as well. Commenting at AMO headquarters in Dania Beach, Fla., AMO National President Michael R. McKay said: "We are encouraged by SeaAmerica's remarkable advance to this significant point. This privately financed project means lasting jobs in several industries, including seafaring, shipbuilding, ship repair and supply, and steel. It also means further vindication of the Passenger Vessel Services Act, which is the target of undue criticism and a short-sighted repeal movement." Enacted in 1886, the PVSA reserves domestic cruise, ferry, excursion, and casino vessel markets for vessels owned, built, registered, and crewed in the U.S. "SeaAmerica willingly met those mandates," McKay said. "Like American Classic's 'Project America,' the SeaAmerica initiative confirms that the cabotage law works as intended." Turner, a certified public accountant and former finance manager for Norwegian Cruise Line, said SeaAmerica will cater primarily to the lucrative business meeting and convention market. Each ship will include large and small conference rooms and an auditorium. "It's the best opportunity in the cruise market today," Turner said. "There is a market there." Under current tax law, a business cruise passenger can deduct up to $2,000 of the cost as an expense while in conference aboard a U.S.-built, U.S.-registered ship, and an employer who provides U.S.-flag cruises to employees as bonuses or incentives can deduct up to $2,000 for each employee. No tax deductions are permitted for business meetings or incentive cruises held aboard foreign-built or flagged ships. Independent market analyses show annual North American cruise sales of $6 billion a year. The studies project sustained growth in the U.S.-based industry--especially in the convention, business meeting, and incentive sectors, which grew by an estimated 46 percent in 1998. Each SeaAmerica ship will accommodate 1,000 passengers and 450 officers and crew members. According to the vessel design, 85 percent of the cabins will be outside, and 65 percent will have balconies. Each ship will include adjoining cabins, and each will allow easy access by disabled passengers. Public areas will feature what Turner called "classic luxury" and "casual elegance." Several restaurants and lounges will compliment the main dining room, entered from a grand staircase. In addition, each ship will feature indoor and outdoor swimming, a fully equipped gymnasium and spa, a running track, sports equipment, and a two-deck observation lounge with a piano bar and library. Each will offer recreation areas for children and teenagers. SeaAmerica Cruise Line on April 1 was awaiting Maritime Administration approval of its application for shipbuilding loan guarantees authorized in Title XI of the 1936 Merchant Marine Act. SeaAmerica Cruise Line is the second major ocean-going U.S.-flag cruise fleet expansion project. The first was launched by the Chicago-based American Classic Voyages. In March, the hull was completed at Atlantic Marine in Jacksonville, Fla., for the first of up to five mid-sized coastal cruise vessels to be operated by Delta Queen Coastal Voyages, a new ACV subsidiary. AMO will provide the officers for the vessels, beginning next year. In July 2000, Litton Ingalls will begin fabrication of the first of at least two large luxury ships to be operated in Hawaiian Islands cruise trade by United States Line, a historic name acquired by ACV for a new unit established as part of "Project America." AMO will man the new construction in all licensed positions. In December 2000, the former Holland America Line ship Nieuw Amsterdam--now the M/S Patriot in American registry--will enter the Hawaiian cruise market under the American Classic Voyages banner. AMO will man the reflagged ship. American Classic Voyages also owns the New Orleans-based Delta Queen Steamboat Co., which operates the Mississippi River paddlewheel cruise vessels Delta Queen, Mississippi Queen, and American Queen under AMO contract. Delta Queen will soon operate a fourth vessel, the Columbia Queen, in the U.S. | |||
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