After having pulled the Pride of Hawaii out of the market, Norwegian Cruises line (NCL) is also withdrawing the Pride of Aloha from Hawaii. The remaining year-round ship in Hawaii will be the Pride of America.

The Pride of Aloha is being transferred to Star Cruises and will be reflagged and deployed in Asia in the summer of 2008. She will be leaving NCL in May.

The Pride of Hawaii is being renamed the Norwegian Jade and redeployed in Europe for the summer season.

When NCL announced the withdrawal of the ship, the company said it was temporary, but the Pride of Hawaii/Norwegian Jade is not included in the company’s Hawaiian program for 2009 nor 2010.

The pull-outs cuts NCL’s capacity in Hawaii from  an estimated 340,000 in 2007 to 133,600 and reduced the overall Hawaiian market capacity by some 48 percent year-over-year.

Company Commentary 

In a prepared statement, Andy Stuart, vice president of marketing, sales and passenger services, said as the company moves forward with Freestyle 2.0 and brings its product to next level, it cannot justify further investment in this ship. The Pride of Aloha is the former Norwegian Sky and was built in 1999.

He went on to say that with the Pride of America, NCL has created a commercially successful modern U.S. flag cruise ship homeported in Hawaii.

NCL President and CEO Colin Veitch commented that “the price level in the market has been driven down by an unprecedented level of capacity from low-cost foreign-flag ships. These are based on the West Coast and operate domestic Hawaii itineraries that the Customs Services had indicated are legally the preserve of U.S.-flag ships.”

Veitch went on to say that NCL has invested in U.S.-flag cruising in reliance on the cabotage laws providing a level playing field.

 Veitch said that NCL’s remaining ship is generating an encouraging profit now and that he projects continued improved in the one-ship operation as the cabotage situation is clarified and restored. In due course, he said he hopes to build the company’s Hawaii business back up to two ships.

Different Perspective

According to Cruise Industry News (CIN) estimates, foreign-lag capacity in Hawaii was 81,000 in 1999 and 106,900 in 2007. American-flag capacity, however, went from an estimated 43,000 in 1999 to 340,000 in 2007, according to CIN.

In 1999, American-flag American Haw All Cruises had an annual passenger capacity of 43,000. By 2001, American Hawaii and newcomer United States Lines had a combined passenger capacity of approximately 75,000. The next year, they were both gone.

In 2002, NCL was in the market with an annual passenger capacity estimated at 144,400. NCL’s entry into Hawaii was a bold undertaking, seeking to dramatically grow a market that long existed, but had never really taken off, while also coping with American labor, higher operating costs and less onboard revenue potential (no casinos).