American Classic Voyages reports losses of $13 million
Advertiser Staff and News Services
American Classic Voyages Co. said yesterday that losses widened to nearly $13 million in the first quarter, driven by the slowing economy and increasingly competitive pricing.
The Chicago-based cruise line reported a net loss of $12.7 million, or 60 cents a share, for the first quarter ended March 31, compared with a net loss of $6.4 million, or 33 cents a share, in the same quarter a year ago.
Revenue rose 58 percent, to $64.2 million from $40.7 million in the year-earlier quarter.
The company also said it had to price its Hawai'i cruises aggressively to absorb a 140 percent increase in capacity with the arrival of its 1,212-passenger Patriot, the first vessel under its new United States Lines brand, in addition to its existing 860-passenger Independence, which operates under the American Hawaii Cruises brand.
First-quarter figures also reflected the costs of cruise ship maintenance.
In March, the Independence was removed from service for one week for repairs that cost about $500,000.
In February, the Patriot interrupted its seven-day cruise for unscheduled repairs, resulting in refunds to passengers of approximately $1.6 million, and travel credits for future cruises expected to cost approximately $500,000.
Chief executive Phil Calian said the Independence is showing the greatest decline in yields in the Hawai'i market. In the first quarter, the company reported yields on American Hawaii cruises of $130 per passenger night, a decrease of 39 percent from the comparable period a year ago.
For the year, the company estimated yields at American Hawaii to be $105 and yields at United States Lines to rise 25 percent to 30 percent.
"On a positive note, we seem to have reached bottom with pricing and have experienced positive booking momentum in Hawai'i during the past month, as well as significantly increased group allotments for 2002," Calian said.
American Classic also reported startup costs of $900,000 in the quarter for new ships and $2 million in pre-marketing costs for vessels that were not in service. The first quarter last year did not include any start-up costs but did include $1.1 million in pre-marketing costs for ships that were not in service.
The company's United States Lines subsidiary will add a new 1,900-passenger liner to the Hawai'i market in early 2003, and another in 2004.