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The Honolulu Advertiser
Posted on: Wednesday, March 26, 2003

Norwegian predicts 10,200 jobs for Hawai'i

By Kelly Yamanouchi
Advertiser Staff Writer

Norwegian Cruise Line chief executive Colin Veitch said yesterday a U.S. government exemption allowing his ships exclusively to sail interisland in Hawai'i will result in as many as 10,200 new jobs in the state.

A study commissioned by Norwegian Cruise Line and conducted by accounting firm PriceWaterhouseCoopers concluded the three cruise ships the company plans to sail in Hawai'i by 2007 will create 20,400 jobs for U.S. residents, half of which would be from Hawai'i. The figure includes 3,000 jobs on board ships.

"The intention of the legislation was to create jobs in Hawai'i," said Veitch. "So we'll make every effort we can to deliver on that."

Veitch said Norwegian will start recruiting and training for the jobs as early as this summer. Veitch said he will attempt to fill all the shipboard jobs with Hawai'i residents if there are enough qualified candidates.

"It's going to be full of people from Hawai'i who are welcoming you to their home and can tell you about it," Veitch said.

According to the study, the three ships would also add $828.7 million to the U.S. economy annually and $358.4 million in federal tax revenue by the end of 2007. Officials at the state Department of Business, Economic Development and Tourism, said those figures seem plausible.

Last month, President Bush signed into law a provision, supported by Sen. Daniel Inouye, D-Hawai'i, that gives Norwegian Cruise Line the right to put a U.S. flag on three foreign-built ships, which the company can then use for interisland cruises in Hawai'i.

Sen. John McCain, R-Ariz., has criticized the law, saying it likely will lead to higher consumer costs by limiting competition for Hawai'i interisland cruises.

Veitch said the interisland cruises will "command a premium" price compared with current Norwegian cruises in Hawai'i that include a stop in Fanning Island and have a crew of mostly non-U.S. citizens.

"That premium is able to support a U.S. flag structure," Veitch said, which will cost more to abide by U.S. labor laws and pay U.S. taxes, though the interisland cruises will have less expense for fuel and Norwegian should earn more from selling land tours.

The seven-day interisland cruise would allow passengers to spend 91 hours in the Islands, compared with only 36 hours during the Norwegian Star's Hawai'i-Fanning Island itinerary.

"At the end of the day we'll probably not make as much money (on the interisland cruises)," Veitch said. "But we will still make money."

Norwegian's first $350 million U.S. flagged cruise ship is scheduled to begin sailing seven-day interisland cruises in summer of 2004, followed by a second reflagged ship as early as the end of next year.

Norwegian has not yet contracted for the third ship, which would be the other Project America ship, to be completed. But plans are for all the three U.S. flag ships would be in operation by 2007.

Though Norwegian is the only major cruise line with ships based in Hawai'i now, Veitch said other companies will be closely watching Norwegian to see how successful it is at operating U.S.-flag ships here.

"I suspect people will sit and watch what we do, and figuring out what we're doing right and what we're doing wrong," Veitch said. If other cruise lines found the operation could work, "I think there would be interest."


Correction: A study commissioned by Norwegian Cruise Line concluded the three cruise ships the company plans to sail in Hawai'i by 2007 will create 20,400 jobs for U.S. residents, half of which would be from Hawai'i. A previous version of this story said all 20,400 jobs created would be in Hawai'i.