ECONOMY

Greek shipping’s dire straits; cruise sector is the worst affected

The year 2003 could be described as one of the most difficult for Greek shipping interests. Although conditions in the industry were relatively good, Greek passenger and merchant shipping ran into stormy weather on a number of occasions. After the Prestige disaster off the coast of Spain in November 2002, the oceangoing segment came under fire from French President Jacques Chirac and European Union Commissioner Loyola de Palacio, which was followed by strict new regulations in Community ports – without the agreement of the International Maritime Organization (IMO) – that have created considerable difficulties for tankers. Passenger shipping, meanwhile, is still in the midst of a protracted downturn, largely due to excessive borrowing and the acquisition of very expensive vessels in recent years. However, the most serious developments last year seem to be those affecting the cruise industry, which had already been going through hard times after September 11. Royal Olympia Cruises (ROC), Greece’s virtually only international player in the sector, appeared to be coming out of difficult straits, achieving full capacity utilization in its vessels, when it suddenly found itself in the middle of a «financial attack» that company officials are at a loss to explain. Its two star vessels, Olympia Voyager and Olympia Explorer, were immobilized in a US port just before Christmas because of legal action from German creditors who claimed the company had not submitted a debt-restructuring plan for a $250 million loan. A third ROC vessel, the Olympia Countess, faced the same problem in South Africa last week. ROC officials say, however, that a plan submitted was rejected without even being discussed. Meanwhile, Festival Cruises of Greek-Italian interests has filed a memorandum with the European Commission, pointing to a rise in monopolistic conditions and the development of a dominant position in the European cruise market by Carnival Cruises, of US interests, which has bought out several European cruise firms in recent years. It has highlighted that Carnival’s market share now exceeds 30 percent (in Germany, 65 percent). ROC, which is listed on the New York Stock Exchange, has filed for bankruptcy under Chapter 11, which affords it a period to reschedule its debts.