“My function is to improve the product; return the company to profitability; and to put it in a position to have access to capital markets,” said Adam Aron, newly appointed President and CEO of Kloster Cruise. He assumes his new position August 9.
Aron was most recently Senior Vice President of Marketing for United Airlines and has also been a member of the board of Royal Caribbean Cruise Line.
Aron identified Kloster’s strengths to be its three brand names, Norwegian Cruise Line, Royal Cruise Line, and Royal Viking Line. Each has the potential to be a market leader, he said. He also emphasized the company’s fleet of ships, especially the Dreamward, Windward, Norway, the Odyssey ships, and the Royal Viking Sun and Queen, as well as the company’s workforce, which he called ‘very dedicated’ and said they want to be number one again.
Aron also identified what he called ‘opportunities for improvement’. He said that Kloster Cruise now has a significant cash position but does not have access to capital markets. He said that getting capital to grow in the immediate term would be difficult. First, the company must turn a profit, he said.
Secondly, Aron said that the ships’ gaming operations were not generating enough return for the company.
Thirdly, Aron said that he saw a tremendous opportunity for the NCL brand to end or lessen its massive discounting strategy. He said that NCL was giving away its product far too easily and that there was a significant opportunity to end that.
According to Aron, some of NCL’s prices have been lower than the competition. One task will simply be to just get up to market level, Aron said, adding that pricing is also a function of supply and demand. If there is increased demand for NCL’s product, then prices can go up. He noted that part of the job would be to improve the efficiency of NCL’s sales and marketing.
Fourthly, Aron pointed out opportunities to improve NCL’s product and to become the best in the market segment. He said that cabins on NCL ships were often larger than on the ships of competing cruise lines. He also noted the multiple dining rooms on several of NCL’s ships. He said these were factors of great appeal that may not have been properly capitalized on yet.
“Another of my missions will be to cut costs,” Aron said. He said there were some areas where he saw opportunities to cut costs, but would not identify them yet “Another way to invest more in the passengers is to take money that is already being spent on something else,” Aron added.
Aron also said that Kloster’s ship operating costs were not that different from Carnival Cruise Lines or Royal Caribbean Cruise Lines in spite of their larger ships. “Their main benefit from economies of scale is on shore,” Aron said, “they are able to spread their corporate overhead over more beds.” He said he was looking at ways to even the playing field.
Aron also pointed out his strong pro-travel agent reputation. “I will get the support from travel agents,” he said, “especially if I can give them service and products that please their clients.”
Autonomy
Aron said he was looking forward to working with Knut Kloster, Jr., Chairman of Kloster Cruise, as a team, and was also looking forward to an active involvement by the company’s board members. However, Aron also noted that there is a fine borderline separating the proper roles of management and board members.
“I intend to be extremely consultative and I believe we will be successful as a group,” Aron said, “but I also expect to have as much autonomy as I need.”
“My job is to run the company and to turn Kloster Cruise into a profitable and growing company and to restore its former luster; Aron said. He also said it was premature to say whether he would initiate other executive changes yet. However, he emphasized that he will be aggressive and dynamic.
Aron said he could not comment on reports that Kloster again is looking to sell the older “white ships.” In Norway, meanwhile, Vard, parent company to Kloster, has pulled out of negotiations to sell its ferry division.
Prior to joining United, Aron was Senior Vice President of Marketing for Hyatt Hotels and before that, Vice President of Marketing at Western Airlines.
