"We actually see this destination having the potential to be as big as Alaska," said Colin Veitch, Norwegian's chief executive. Veitch said his strategy is to make his cruise line the Hawai'i specialist in the cruise industry.

Norwegian is bringing two U.S.-flagged ships to Hawai'i next year. The first is being completed at a German shipyard. Plans are to bring a third U.S.-flagged ship to the Islands in 2006.

Veitch's plan for Hawai'i is buttressed by federal legislation passed earlier this year that gave Norwegian the right to put U.S. flags on foreign-built ships. That enables Norwegian to skip a foreign port call at Fanning Island in the Republic of Kiribati. The legislation is written to effectively apply only to Norwegian.

In the cruise industry, "the challenge is to have something different to offer," Veitch told business leaders at a luncheon yesterday. The strategy for Hawai'i is part of that differentiation, he said.

Norwegian's new ships would contribute to doubling Hawai'i's market share in the global cruise industry from 3 percent to 6 percent, said Veitch, who expects annual growth of 23 percent. That would take the total number of passengers cruising in Hawai'i to 650,000 by 2007, up from 242,000 last year. Hawai'i's portion of Norwegian's business would grow from 17 percent to 30 percent.

Veitch sought to assure local tourism industry leaders yesterday that he would not be competing with them.

"This is not cannibalism on Hawai'i's own business," Veitch said. "Where we will take the (market) share is from all of these other cruise destinations."

So "nobody here is going to be losing," Veitch said. He said Norwegian "will be adding to the total Hawai'i mix" by drawing more passengers from across the Mainland, including the Eastern region and the Midwest. Los Angeles, New York and Honolulu are the top city markets for Norwegian's Hawai'i cruises.

Gov. Linda Lingle, who also spoke at the Hawaii Business Top 250 luncheon, said: "I think there will be a sigh of relief to those who are in the hotel industry here who felt that perhaps the cruise industry was taking something from them."

Veitch said the increase in cruise ships can help draw additional flights to Hawai'i because the interisland cruise is "so much better" than the Fanning Island cruise.

He believes Norwegian will succeed where others may fail because it benefits from economies of scale, newer ships, and the name recognition and infrastructure of the company.

At the same time, labor costs are more than twice as much for U.S.-flagged ships, which must follow U.S. labor laws.

American Classic Voyages operated U.S.-flagged interisland cruises, but it went bankrupt in 2001.