ECONOMY

Cruise industry facing demise

Employees of Royal Olympia Cruises (ROC) – virtually Greece’s only remaining international cruise operator, which is facing bankruptcy – yesterday staged a rally and pressed a proposal with Labor Ministry officials for a broad meeting of all involved to discuss a developing crisis in the sector. They also called for economic support for about 160 employees of the firm that have been put on compulsory leave. ROC’s two young star vessels, Olympia Voyager and Olympia Explorer, were detained in US ports just before Christmas, while the lines’s Olympia Countess was kept in Durban, South Africa, early last month, following legal action by one of its main creditors, German bank KFW. Separately, Synaspismos Left Coalition party deputy Panayiotis Lafazanis yesterday called on the government to initiate an urgent meeting of seamen’s organizations and other public bodies in Piraeus with a view to adopting urgent measures to avert the loss of 1,500 jobs and a further blow to Greek tourism. According to sources, in filing its legal action, KFW claimed to have found «a conflict of views among the main shareholders during discussions for a renegotiation of debts» and stated that ROC had failed to submit a debt-restructuring plan for a $250 million loan. ROC, a New York Stock Exchange-listed firm, filed for bankruptcy under Chapter 11 in the US – affording it a limited period to reschedule its debts – but, it seems, to no avail. The Louis hotel and leisure group, of Cypriot interests, is the company’s main shareholder. For its part, ROC claims that KFW acted without warning after rejecting a debt-restructuring plan without any discussion, and while its vessels were booked to full capacity for months ahead. KFW’s move has been followed by an avalanche of injunctions by Greek creditors, resulting in the immobilization of the the firm’s remaining vessels. A call to auction has already been issued for the Olympia Countess in S. Africa. «No one seems interested in supporting the only Greek cruise company. Creditors are making haste to seize what they can from a company that would have had no problem had it been allowed it to work,» said 8 percent shareholder Andreas Potamianos. The firm has asked for the appointment of a receiver in an effort to salvage what it can. Industry sources in Piraeus take the view that ROC’s demise is largely of its own making, as it had long relied on the protectionist regulations that largely excluded foreign operators from Greek waters but they also blame seamen’s unions which refused to renegotiate pay rates at a time when the industry faced dire straits after the September 11 attacks on the US. Further, they argue that the pack of cards in the industry is being reshuffled, with a younger generation of bankers paying little attention to notions of traditional business relationships. Separately, Genoa’s municipal authority is reported to be putting pressure on the Italian government to do all it can to avert a similar fate for Festival Cruises, of Greek-Italian interests, which uses the city as its base. Festival has won a case brought against it in Marseilles by Credit Agricole for its cruise ship Mistral which was detained there, though the matter has not ended. It has also 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 – and in Germany, 65 percent.