Financial Troubles Force Cruise Line Into Administration

October 31, 2012

(6:30 a.m. EDT) -- Classic International Cruises (Australia) has been placed into voluntary administration, throwing the whole of the line's Australian summer cruise season into doubt.

CIC in Europe has had four ships arrested, including Athena, which was due to leave France for Western Australia on November 12 and spend the European winter in Australia. As many as 6,000 passengers could be affected.

Although the financial issues relate to the European owners of the CIC ships, and not to CIC Australia, the Athena is being held by authorities and will not sail to Australia.
Up until yesterday CIC Australia had been negotiating with Cruise & Maritime Voyages to provide another ship for the season.
It even issued a statement saying it would bring the cruise ship Delphin to replace Athena, but this deal fell through on Tuesday due to scheduling difficulties.

A statement from the line which is posted on its Web site, reads:

“Brad Tonks and John Vouris of the Business Recovery & Insolvency team at Lawler Partners were appointed Voluntary Administrators of Classic International Cruises Pty Ltd (Administrators Appointed) (“CIC Australia”), on 31 October 2012 following a resolution passed by the company. The Administrators understand that CIC Australia's management have been working with the owners of the cruise ship “Athena” to confirm its availability for the 2012 – 2013 voyages after recent reports that Athena was arrested at port and that it is currently unable to depart.

"The management of CIC Australia have been in negotiations to source an alternate vessel to backup Athena in the event that it remains unavailable. A backup was found, however, CIC Australia was notified on 30 October 2012 that a final agreement may not be reached because of delays prior to the scheduled departure of the cruise from Marseille, France on 12 November 2012 ...
Whilst future bookings have now been placed on hold, the Administrators intend to continue the task of sourcing a suitable vessel for the 2012 – 2013 cruises.”

CIC Australia managing director Grant Hunter told the Western Australian newspaper that CIC Australia was put into voluntary administration primarily to isolate its money from the problems of the European owners. He said the move had essentially “ringlocked” the money of the 6000 people who have booked for the Australian season.

Mr Hunter said the decision would also give them time to look for another suitable ship.

But time is running out, with passengers flying in to France from Australia to depart from Marseilles in just over a week's time.

The saga has been playing out on the Cruise Critic message boards, with increasingly worried passengers asking what they should do.

Commenting on the news, Kiwi Kruzer posted:

“Very sad news for everyone.
This will give all of cruising a bad name, and make people think twice about booking in the future.....
Travel Insurance?......You could be in for a tough time getting them to recognise a claim.
Refund?....The first thing Administrators do is find out where all the cash is and freeze it to pay their own and existing bills. Refunds will way at the back of the queue I am afraid.”

The Athena has been operating out of Western Australia for nine years.

--by Adam Coulter, U.K. Editor