NCL Acquires Vintage Ships

April 17, 2003
In a move that has the cruise world abuzz, Norwegian Cruise Line announced this week that it has acquired the S/S United States and the S/S Independence, two of cruisedom's most venerable ships. The 53,000-ton S/S United States, which was launched in 1952, has been one step away from scrap for years -- after numerous attempts at conversion (time share cruise ship, floating hotel, etc.) failed. In its glory days the ship set an unbroken record for speed when it crossed the Atlantic in 3 days, 10 hours and 42 minutes. It has been languishing in the Philadelphia Naval Yard. The 20,000-ton S/S Independence, another vessel with quite an uncertain future, was built in 1951 and, until September 2001, sailed Hawaiian itineraries under the American Classic Voyages banner. The obvious question industry observers and cruise passengers alike have been asking is: Why buy two old ships when you could build a new one for the same cost -- or less? NCL President Colin Veitch is ready for that question, noting in an interview with Cruise Critic that the decision to make what amounts these days to two rather unusual acquisitions was both sentimental -- and practical. "It was an opportunistic purchase because the future of both ships looked shaky," Veitch says. "As the [industry's] designated U.S. flagged carrier, we felt we had to act to save both of these ships." Another appeal -- a major one at that -- according to the NCL chief is that both ships were built in the U.S. and are eligible to operate as domestic vessels under existing American laws. Company leaders, he said, have been pondering the issue of how to continue expanding its "Homeland Cruising"  strategy. By "Homeland Cruising," he's talking about the relatively new development in which a federal law was passed that allows NCL to complete the stalled Project America (which failed when its owner, U.S. Lines, went out of business after September 11) and revitalize its original plan to operate U.S. flagged and manned ships for inter-island Hawaii itineraries. NCL had purchased the unfinished Project America ships and parts and is in the process of completing them (the first is planned for launch in July 2004). This legislation, in addition to the two partially completed Project America ships, was also expanded to include one existing NCL vessel. But, says Veitch, "The 'Homeland Cruising' strategy is to bring ships close to population centers. We want to have as many different itineraries as possible for people to choose from." To achieve that growth, there were basically just two options: build from scratch in a U.S. shipyard or buy existing American-built vessels (from which there is a very, very limited supply). NCL plans, though still evolving, most likely call for a hull refurbish (several sources from other companies said the hulls on both ships were in amazingly good shape) and then send the ship over to a European shipyard for a complete rebuild. "It's not a cosmetic refurbishment," Veitch says, "but tantamount to a new build. And when they're finished they are not going to be 1950s recreations but modern, appealing cruise ships with a long life ahead of them." Veitch declined to reveal what NCL paid for S/S United States but, interestingly, the company, which spent just over $4 million in purchasing Independence, did say it made that purchase amidst much secrecy, in February from the U.S. Maritime Association. Practically speaking, Veitch says, the bottom line is that, once rebuilding is complete and the vessels launch, the purchases allow the company to expand "Homeland Cruising" itinerary options beyond Hawaii. "We are not proposing to put them in Hawaii," he says. "We think there is a lot of potential on the mainland on coastal itineraries."