Pride of America - replacement or sister ships?

[Ox Fan Cruiser]

With the Jones Act requiring only US built ships for a Hawaii based ship, does NCL have any plans to build another US built ship? With another one they could have round trippers from LA or San Fran without having to stop in Mexico or Canada.

[FreestyleNovice]

The cost of an US flagged, staffed and based ship is probably to high (as an investment) for a 2nd ship, as an investment.

 

Some on CC said that the Pride is one of NCL's best (or the best, can't recall) cashcows in terms of profit.

 

Your answer is somewhere in between those two with a mix of passenger load versus (over)capacity. :)

[Ox Fan Cruiser]

The cost of an US flagged, staffed and based ship is probably to high (as an investment) for a 2nd ship, as an investment.

 

Some on CC said that the Pride is one of NCL's best (or the best, can't recall) cashcows in terms of profit.

 

Your answer is somewhere in between those two with a mix of passenger load versus (over)capacity. :)

P.of A. is getting to be a senior now. If the route is profitable and passengers wanting "the new boat" you would think NCL must be wondering what it will do in the future. Either that or in the industry trying to do away with the Jones Act?

[bob brown]

NCL used to have three ships in Hawaii service, but could not make a 'go' of it, financially, so they reflagged the ships, and left the Pride of America as its only US flagged ship...

The Norwegian Sky was the 'Pride of Aloha', and the Norwegian Jade was the 'Pride of Hawaii', during the NCLAmerica years of operation.

 

When its time to retire the Pride of America, they likely will have a hard time getting a US built hull to replace her...unless they can get a variance like they did for the other two foreign built ships to be US registered.....

[Ox Fan Cruiser]

NCL used to have three ships in Hawaii service, but could not make a 'go' of it, financially, so they reflagged the ships, and left the Pride of America as its only US flagged ship...

The Norwegian Sky was the 'Pride of Aloha', and the Norwegian Jade was the 'Pride of Hawaii', during the NCLAmerica years of operation.

 

When its time to retire the Pride of America, they likely will have a hard time getting a US built hull to replace her...unless they can get a variance like they did for the other two foreign built ships to be US registered.....

Its hard to believe that a shipyard like Newport News (Virginia) couldn't make a cruise ship. At least make it to the point where it could be sailed to Europe to have the furnishing put in. Their work force might have the people for the finer touches of a cruise ship. Aircraft Carriers don't have to many grand marble stairways & foyers.

[garycarla]

Its hard to believe that a shipyard like Newport News (Virginia) couldn't make a cruise ship. ..

 

Apparently the numbers do not work, or the capability, or desire or somewhere in between. With the number of new cruise ships over the past 5-10 years, there MUST be some good reasons none have been built in the U.S. Might not seem to make sense to the average layman, but folks with mega millions at stake have shown that building here is not a good business decision.

 

As to Hawaii - the earlier post about three ships is right on the money. They failed miserably when they had three of them. Between demand, costs of supplying the ships and dealing with a mainly America crew it just did not work.

 

As to sailing from West Coast to Hawaii - guessing there is not that much demand either. And, based on my years on a Navy ship, I would not take that trip anyways. The swells seem to come from the North/Northwest hitting the ship broadside, and rock the ship sideways all the way across.

[Uniall]

NCL used to have three ships in Hawaii service, but could not make a 'go' of it, financially, so they reflagged the ships, and left the Pride of America as its only US flagged ship...

The Norwegian Sky was the 'Pride of Aloha', and the Norwegian Jade was the 'Pride of Hawaii', during the NCLAmerica years of operation.

 

When its time to retire the Pride of America, they likely will have a hard time getting a US built hull to replace her...unless they can get a variance like they did for the other two foreign built ships to be US registered.....

 

Its hard to believe that a shipyard like Newport News (Virginia) couldn't make a cruise ship. At least make it to the point where it could be sailed to Europe to have the furnishing put in. Their work force might have the people for the finer touches of a cruise ship. Aircraft Carriers don't have to many grand marble stairways & foyers.

 

NCL should have an easy time doing a "enlargement" project in an American Dry Dock on a pre-existing ship and getting it approved.

 

I'd book a 21 day cruise with

7 days from Vancouver to Hawaii with ports in San Francisco, San Diego, & Ensenada

7 days Hawaii Islands cruise

7 day return to Vancouver with ports in Puerto Vallarta, LA, & Seattle.

[GeezerCouple]

NCL should have an easy time doing a "enlargement" project in an American Dry Dock on a pre-existing ship and getting it approved.

 

I'd book a 21 day cruise with

7 days from Vancouver to Hawaii with ports in San Francisco, San Diego, & Ensenada

7 days Hawaii Islands cruise

7 day return to Vancouver with ports in Puerto Vallarta, LA, & Seattle.

 

Can't NCL do this particular sample 21-day itinerary already, as long as they only sell it as a full 21-day trip?

 

Then it's just a Vancouver-Vancouver cruise, with several Ports of Call in the USA... just like the Vancouver-Vancouver roundtrips to several Alaskan ports.

 

But also... is NCL not able to re-position the Jade, for example, back to Hawaii, given it was once "allowed"?

[SeaShark]

 

As to Hawaii - the earlier post about three ships is right on the money. They failed miserably when they had three of them. Between demand, costs of supplying the ships and dealing with a mainly America crew it just did not work.

 

Actually, NCL had five ships in Hawaii service as recently as 10 years ago...not just the three NCLA ships

[SeaShark]

 

But also... is NCL not able to re-position the Jade, for example, back to Hawaii, given it was once "allowed"?

 

No, they cannot. One of the conditions of the exemption was that they could never sail with paying guests from American ports outside of Hawaii. That was why the Jade was originally sent to Europe...just in case they would want to relax her. That exemption has since been lost.

[bob brown]

Its hard to believe that a shipyard like Newport News (Virginia) couldn't make a cruise ship. At least make it to the point where it could be sailed to Europe to have the furnishing put in. Their work force might have the people for the finer touches of a cruise ship. Aircraft Carriers don't have to many grand marble stairways & foyers.

That pretty well sums up how NCL got the Pride Of America...hull built at Litton-Ingalls shipyard in Pascagoula, Ms., and towed to Bremerhaven, Germany, to be completed by Lloyd Werft.

Read the whole story here...https://en.wikipedia.org/wiki/Pride_of_America

[chengkp75]

Okay, bit of history here from someone who was part of the original Pride of America project (though transferred to Aloha when POA sank in Germany) and was part of the program for 4 years.

 

What Wiki doesn't say about the POA's acquisition by NCL, is that they got it from the US government, which was on the hook for the construction loan guarantees to Hawaiian American Lines, so NCL helped out the US taxpayers by assuming the construction loan in exchange for finishing the ship overseas and being allowed to "flag in" two ships with PVSA exemptions.

 

Actually, the restriction on the NCL ships does not preclude carrying passengers outside of Hawaii, when travelling to/from a mainland shipyard. Which is why POA had the West Coast to Hawaii cruise last year, returning from the yard.

 

As to building a new cruise ship in the US, as much of a proponent of US flag shipping as I am, I know that it really isn't a feasible scenario. A poster mentioned Newport News, and while this yard has the physical capability to build a cruise ship, they do not have the experience to do so, and the biggest problem is that the yard hasn't built a commercial ship in 40 years. Building for the US Navy and building for a profit based company are two totally different things, and for the most part, shipyards in the US cannot compete in cost or experience (time) with overseas yards to produce a ship that is economically viable. Only the protections of the Jones Act and the PVSA make US built ships feasible. I work on Jones Act ships, and even with everything but the hull steel being built overseas and shipped to the US yard pre-assembled, the ships cost twice as much as a comparable ship built overseas.

 

As to finishing a cruise ship overseas, that becomes tricky, as the percentage of the ship and equipment that is US built is fixed, so not sure if that would work. Also, European shipyards don't build the cabin modules, they are built by subcontractors, in many cases far from an ocean, and trucked to the yard, and we don't have that infrastructure in the US (the subcontractors who are geared up to produce these modules in bulk).

 

NCL lost money on the three US flag ships, mainly due to poor planning for US crew, building capacity too quickly, and excessive competition from the other cruise lines. NCL didn't, and to an extent, still don't know how to deal with US labor, though it is getting better. Not only are wages and benefits much higher than international crew, but the training and documentation costs are much higher, running around $8-10k per crew member, prior to them even reporting onboard. I firmly believe that going from one US flag ship (as noted, the Star was doing Hawaiian runs at the time as well) to 3 in just over 2 years was too fast, and outstripped demand for an unknown product. Finally, when the other cruise lines saw the prices NCL was commanding for their Hawaiian cruises, they brought a 500% increase in their Hawaiian cruises over the period when NCL had 3 ships, which forced NCL to drop cabin prices to where they were losing money.

 

As to longer cruises with a US flag ship, NCL's current round Hawaii 7 day cruises cost about as much as a 14 day cruise from the West Coast on a foreign flag ship, despite the longer cruise using 5-6 times as much fuel as the NCL cruise. If you did a West Coast cruise on a US flag ship, no one would book it because it would be 2-3 times as expensive as a foreign flag cruise of the same itinerary, with only a stop in Vancouver or Ensenada to comply with PVSA. Even uniall's proposed itinerary includes Mexican ports, so there is no incentive to use a US flag ship.

 

As to "re-using" the Jade as a US flag ship, no, once a PVSA exemption is given up, it must be re-applied for, and there has to be a good reason for granting it, and in the case of the Jade and Sky, this was specifically prohibited in the initial legislation.

 

POA is only 15 years old, so she is just now getting to the point where she is required to drydock twice in 5 years, instead of allowing an underwater inspection in lieu of the mid-period drydocking, and the cost and extent of surveys during the shipyard periods gets greater with age, but I suspect she will be around for at least another 10 years. What happens after that? They will probably try to keep her running, much as Hawaiian American kept the Constitution and Independence running long after they should have been retired. There is just about no hope that I can see of building a ship in the US that would in any way be profitable.

 

As to "doing away with the Jones Act", the cruise industry could care less about the Jones Act, since that act only deals with cargo ships. As to doing away with the PVSA, CLIA has stated that none of their members (all of the major cruise lines) have any interest in even modifying the PVSA, as it would have a minimal impact on their bottom line, and may trigger more restrictions on foreign flag cruises out of the US.

 

As to the POA being a "cash cow", that is just not correct. Even at the elevated fares the ship charges, the ship just barely breaks even on the cabin fares, and the profit is in onboard revenue. Many have quoted Kevin Sheehan's comments at the time about getting the Hawaiian operation "more profitable" than it was, but when you compare that with losing $174 million a year, even breaking even is "more profitable".

 

As to "enlarging" an existing foreign flag ship, and "getting it approved", the only way you will get around the US built content rule is to have a reason that Congress will respond to, like bailing them out of the construction loan on POA. Short of that, you aren't going to get an exemption.

[dexddd]

P.of A. is getting to be a senior now. If the route is profitable and passengers wanting "the new boat" you would think NCL must be wondering what it will do in the future. Either that or in the industry trying to do away with the Jones Act?

 

Senior, maybe, maybe not. POA just had a major refurb March 2016 and it looks great.

[sanger727]

I very much doubt it would be financially viable to do this. Other lines run the 14-15 day round trip itinerary for the same amount as 7 days on the POA. I assume the difference is related to the costs associated with a US flagged ship. If they were interested in trying this it would be easy enough for the POA to run that itinerary a few times a year but I think NCL has found a niche for it for being able to cruise Hawaii without doing a 4 day ocean crossing.

 

 

Sent from my iPhone using Forums

[garycarla]

Okay, bit of history here from someone who was part of the original Pride of America project (though transferred to Aloha when POA sank in Germany) and was part of the program for 4 years.....

.....

 

What an great review of the history and reality. Thanks for posting all that detail.

[ohioNCLcruiser]

The Pride of America will be the next SS Norway of the fleet in terms of being the old Grandmother in the fleet. As long as they maintain her well with dry docks people will continue to go. With her being the only 7 day Hawaiian cruise she has zero competition and that ship is the CASH COW of the fleet. Shore excursions alone bring in more $$ than ships twice her size bring in with the casino and shore ex combined.

[datolim]

Okay, bit of history here from someone who was part of the original Pride of America project (though transferred to Aloha when POA sank in Germany) and was part of the program for 4 years.

 

What Wiki doesn't say about the POA's acquisition by NCL, is that they got it from the US government.................................................................................................................................................................................................. .

 

Yes I remember the early years very well. When Dato Lim from Star Cruises first started cruising the Hawaiian islands by bringing in the Star Crises Spirit there. That slender ship could do almost 30 knots to Kiribati in 2 sailing days. Kiribati is a distant port and he bought of the islanders and exclude all the competitors from the Hawaiian waters.

 

 

Later he bought over NCL with Carnival. Carnival then back out and he found Leon Black from Apollo to buy their 1/2 share. Black look at his Hawaiian ships and he would not touch it. Everybody knows you cannot operate a US flag ship. The cost difference with running a foreign flag ship is like day and night. I am not sure what sort of deal was later done with Black who had control of NCL. NCL later absorbed POA.

 

 

Then Senator Inuoue of Hawaii was instrumental in getting the exemption pass in Congress. I was one who belief Dato Lim was out of his mind. It is not just about every crew qualifying as a seaman but the US labour laws, pay and trade unions. Last I heard they allowed 25% of crew from foreign countries and they must be doing all the work. Otherwise I don't think we would have the POA today.

 

Your figure of $174M loss in the early years is about right, I think. POA is a relatively young ship and has many more years to go. I think it will be in Hawaii for many years to come.

[bob brown]

Okay, bit of history here from someone who was part of the original Pride of America project .

Permit me to add my thanks for your detailed and informative post...I always enjoy your responses to various maritime questions...perhaps you should revise that Wiki article?;)

[chengkp75]

Then Senator Inuoue of Hawaii was instrumental in getting the exemption pass in Congress. I was one who belief Dato Lim was out of his mind. It is not just about every crew qualifying as a seaman but the US labour laws, pay and trade unions. Last I heard they allowed 25% of crew from foreign countries and they must be doing all the work. Otherwise I don't think we would have the POA today.

 

 

Actually, the fact that every crew member on the POA is required to have a merchant mariner's document is a very costly proposition. Only the deck and engine crews on international ships are documented mariners. The US requires that everyone on a ship that has an emergency duty be fully credentialed. The cost of the training and documentation, the cost of the TWIC document (which includes an FBI background check) all add up to the figure of about $8-10,000 per crew member, just to get them to the gangway for the first time. Then, since they are US citizens, on a US ship, and in a US port, there is nothing to keep them there, and unlike unhappy international crew who must fulfill their contract in order to get their repatriation paid, the US crew can quit at any time. And they did, the record was quitting after 45 minutes onboard, after 2 months of paid training. And, unlike the international crew, where if a steward quits, they call the crewing agency and there is a replacement on the next flight out, there is not a pool of documented mariners who want to work as cabin stewards just waiting for a job, so it takes a couple of months to get a new hire credentialed to be a replacement. In the meantime, the ship sails shorthanded.

 

All US flag ships are allowed up to 25% of the unlicensed crew (licensed officers must be US citizens) to be US resident aliens (green card holders). NCL got another exemption to permit a portion of that 25% to be NRAC (non-resident alien crew). These are typically supervisors who were brought over to train the US crew. The USCG were not pleased with this bill, as this requires them to issue merchant mariner documents to aliens, and to do so with background checks undertaken in the crew member's native country, difficult at best. So, NCL has to pay for these people to get credentialed, they must have been 10 year employees of NCL prior to obtaining NRAC status, and NCL has to obtain an H-1B work visa for the crew, and accept the financial responsibility for the crew member during their stay in the US. The crew are paid US wages, and must have federal and state taxes withheld along with Social Security.

 

The labor union for the majority of the POA crew (all but deck and engine officers and crew) is a basic non-entity. It requires membership, it collects dues, but contract "negotiations" and contract terms are pretty much decided by the company. It is really a non-issue to NCL. The deck and engine officers' and crews' unions are different, but the unions are so desperate for the jobs on NCL, that they accede to almost anything the company wants. Even for the professional mariners in the deck and engine departments, the jobs on POA continue to be the lowest paying jobs in their respective unions.

[datolim]

Yes thank you Sir for another outstanding posting.

How Dato Lim from Star Cruises want to get into this pickle is beyond me.

He has other successes in his business venture around the world. But I understand cruising is his passion.

[chengkp75]

Yes thank you Sir for another outstanding posting.

How Dato Lim from Star Cruises want to get into this pickle is beyond me.

He has other successes in his business venture around the world. But I understand cruising is his passion.

 

Not only with cruising in general, but with the SS United States in particular. This has continued with Crystal's recent interest in the SSUS, and a costly feasibility study.

 

The way it was explained to me was that he wanted Genting to invest in Hawaii, and had seen how poorly the massive Japanese investment had been received, so wanted to be able to say that an American company, hiring US citizens, was buying up the tour operators, golf courses, etc, etc, while if he only broke even on the entire cruise operation he would be satisfied.

[datolim]

Not only with cruising in general, but with the SS United States in particular. This has continued with Crystal's recent interest in the SSUS, and a costly feasibility study.

 

The way it was explained to me was that he wanted Genting to invest in Hawaii, and had seen how poorly the massive Japanese investment had been received, so wanted to be able to say that an American company, hiring US citizens, was buying up the tour operators, golf courses, etc, etc, while if he only broke even on the entire cruise operation he would be satisfied.

 

As a businessman I am not sure he would be satisfied if the operation just broke even. His Bimini venture just turn out to be very bad.

From memory I believed he first cruised the Hawaiian islands with the spectacular active volcanos and he was hook then. He saw the virgin business opportunity without any material cruising company unlike Alaska which was already a crowded market. He then brought in the then Superstar Leo from Star Cruises and then kept on going.

Edited August 8, 2017 by SG007

[TDellaTorre]

Yes, thanks for the history, we cruised on the Pride of Hawaii in OCT-NOV 2007 for our honeymoon and they had already announced at the time that they were turning it into the Jade so we were sad to see her go. I'm always interested to learn more about the ship. We just got back from a cruise on the NCL Escape and it was fun but I missed being on a smaller ship. We may try a 4 day on the Jade if we can swing it, there's one going out next month. Would love to get back on that ship to see how she changed!

[johnrich]

Okay, bit of history here from someone who was part of the original Pride of America project (though transferred to Aloha when POA sank in Germany) and was part of the program for 4 years.

 

 

 

What Wiki doesn't say about the POA's acquisition by NCL, is that they got it from the US government, which was on the hook for the construction loan guarantees to Hawaiian American Lines, so NCL helped out the US taxpayers by assuming the construction loan in exchange for finishing the ship overseas and being allowed to "flag in" two ships with PVSA exemptions.

 

 

 

Actually, the restriction on the NCL ships does not preclude carrying passengers outside of Hawaii, when travelling to/from a mainland shipyard. Which is why POA had the West Coast to Hawaii cruise last year, returning from the yard.

 

 

 

As to building a new cruise ship in the US, as much of a proponent of US flag shipping as I am, I know that it really isn't a feasible scenario. A poster mentioned Newport News, and while this yard has the physical capability to build a cruise ship, they do not have the experience to do so, and the biggest problem is that the yard hasn't built a commercial ship in 40 years. Building for the US Navy and building for a profit based company are two totally different things, and for the most part, shipyards in the US cannot compete in cost or experience (time) with overseas yards to produce a ship that is economically viable. Only the protections of the Jones Act and the PVSA make US built ships feasible. I work on Jones Act ships, and even with everything but the hull steel being built overseas and shipped to the US yard pre-assembled, the ships cost twice as much as a comparable ship built overseas.

 

 

 

As to finishing a cruise ship overseas, that becomes tricky, as the percentage of the ship and equipment that is US built is fixed, so not sure if that would work. Also, European shipyards don't build the cabin modules, they are built by subcontractors, in many cases far from an ocean, and trucked to the yard, and we don't have that infrastructure in the US (the subcontractors who are geared up to produce these modules in bulk).

 

 

 

NCL lost money on the three US flag ships, mainly due to poor planning for US crew, building capacity too quickly, and excessive competition from the other cruise lines. NCL didn't, and to an extent, still don't know how to deal with US labor, though it is getting better. Not only are wages and benefits much higher than international crew, but the training and documentation costs are much higher, running around $8-10k per crew member, prior to them even reporting onboard. I firmly believe that going from one US flag ship (as noted, the Star was doing Hawaiian runs at the time as well) to 3 in just over 2 years was too fast, and outstripped demand for an unknown product. Finally, when the other cruise lines saw the prices NCL was commanding for their Hawaiian cruises, they brought a 500% increase in their Hawaiian cruises over the period when NCL had 3 ships, which forced NCL to drop cabin prices to where they were losing money.

 

 

 

As to longer cruises with a US flag ship, NCL's current round Hawaii 7 day cruises cost about as much as a 14 day cruise from the West Coast on a foreign flag ship, despite the longer cruise using 5-6 times as much fuel as the NCL cruise. If you did a West Coast cruise on a US flag ship, no one would book it because it would be 2-3 times as expensive as a foreign flag cruise of the same itinerary, with only a stop in Vancouver or Ensenada to comply with PVSA. Even uniall's proposed itinerary includes Mexican ports, so there is no incentive to use a US flag ship.

 

 

 

As to "re-using" the Jade as a US flag ship, no, once a PVSA exemption is given up, it must be re-applied for, and there has to be a good reason for granting it, and in the case of the Jade and Sky, this was specifically prohibited in the initial legislation.

 

 

 

POA is only 15 years old, so she is just now getting to the point where she is required to drydock twice in 5 years, instead of allowing an underwater inspection in lieu of the mid-period drydocking, and the cost and extent of surveys during the shipyard periods gets greater with age, but I suspect she will be around for at least another 10 years. What happens after that? They will probably try to keep her running, much as Hawaiian American kept the Constitution and Independence running long after they should have been retired. There is just about no hope that I can see of building a ship in the US that would in any way be profitable.

 

 

 

As to "doing away with the Jones Act", the cruise industry could care less about the Jones Act, since that act only deals with cargo ships. As to doing away with the PVSA, CLIA has stated that none of their members (all of the major cruise lines) have any interest in even modifying the PVSA, as it would have a minimal impact on their bottom line, and may trigger more restrictions on foreign flag cruises out of the US.

 

 

 

As to the POA being a "cash cow", that is just not correct. Even at the elevated fares the ship charges, the ship just barely breaks even on the cabin fares, and the profit is in onboard revenue. Many have quoted Kevin Sheehan's comments at the time about getting the Hawaiian operation "more profitable" than it was, but when you compare that with losing $174 million a year, even breaking even is "more profitable".

 

 

 

As to "enlarging" an existing foreign flag ship, and "getting it approved", the only way you will get around the US built content rule is to have a reason that Congress will respond to, like bailing them out of the construction loan on POA. Short of that, you aren't going to get an exemption.

 

 

 

Thank you so much for constantly “teaching” us about cruise ships and the industry. I really enjoy your posts. They are ALWAYS interesting!

 

 

Sent from my iPhone using Forums

[datolim]

Thank you so much for constantly “teaching” us about cruise ships and the industry. I really enjoy your posts. They are ALWAYS interesting!

 

 

Sent from my iPhone using Forums

 

As a follow up on this thread, and speaking as a Laymen, the prospect of the US building a cruise ship is most unlikely.

 

 

However China appears to be getting into the cruise ship building business now. They have team up with Carnival and their shipyard Fincantieri to build their first cruise ship in China. It makes sense as Fincantiera will be providing the know how. It will must likely be a same model and class of ships as a Carnival ship, down to the door handle and sliding door. From what I know from the RCL experience it takes as little as a few copies for the development cost of the ships to be justified.

 

 

The real work for China is to develop a colony of surrounding suppliers and subcontractors to the shipyard.

It takes time but China has done this with many other industries. Presently cruise ships are dominated by the European shipyards because of this and in spite of the high labor cost.

Their shipyard becomes more as assembly venue as all they do is to attached the 20+ modules together. That is why they can build a 150000 tons ship in as short a period as 2 years.

 

 

Now the question then becomes, what do they do with these ships. China has some capacity to absorb some of this for any new Chinese cruise line. I don't think RCL and NCL would touch them. Carnival might be game as China could give special concessions to them. How far China can take it further from here remains to be seem.

Edited December 17, 2017 by SG007