SS United States - Phila Inquirer 5/9/07

A grand ship may sail again
Jetliners sank SS United States
By Henry J. Holcomb
Inquirer Staff Writer

The skipper of the cruise line that owns the long silent SS United States
says he's not giving up on the ship.
Colin Veitch, chief executive officer of Norwegian Cruise Lines, said in an
interview yesterday that he still believed that bringing the ship back to
life would be "a fantastic project." He has rough-draft plans to maintain
the ship's classic look while adding a deck or two and modern amenities.

In years to come, he said, the storied 55-year-old ship will sail around the
world, make trips from the East Coast to California through the Panama
Canal, cruise the Hawaiian Islands and, possibly, make an occasional run on
its old transatlantic route. And it will earn a profit.

Because of its history, the ship will command premium fares, he said. But
none of that will happen this year - or next.

While NCL Corp. Ltd. has made no announcement about the vessel, which it
bought in 2004, Veitch said that he had no interest in selling the ship and
that a caretaker had been hired to "look after her." He made his comments in
response to a reporter's questions.

Built to wartime standards, in case the United States was needed as a troop
carrier, the thick hull remains strong as the vessel floats quietly at Pier
82, across from the Ikea store in South Philadelphia.

The problems now delaying the ship's return to service can be resolved,
Veitch insists. One big hurdle has been cleared - engineers have declared
that the vessel can be modified to meet modern safety and stability
standards.

The United States is scheduled to be the fourth ship in the cruise line's
U.S.-flagged NCL America Inc. unit, launched in 2004. But that fleet is
still sailing in the red; it was a major factor in NCL Corp.'s $130.9
million loss on $2 billion in revenue last year, compared with $16.2 million
earned in 2005.

Rebuilding the gutted ship for use as a cruise liner would cost about $500
million - more than the cost of a new ship of similar size.

The famed vessel has legions of fans. Web sites and a planned public
television documentary promote its revival. Though its 241,000-horsepower
boilers and turbines have been cold since 1969, it still holds the
transatlantic speed record for averaging nearly 41 miles an hour on its
maiden voyage in 1952.


Done in by jetliners
The vessel was a success at first, but then came the Boeing 707 jetliner,
which whisked passengers across the Atlantic with far greater speed and
comfort than propeller planes.
When NCL Corp. bought the 990-foot-long vessel, it hoped it would be sailing
again by 2006.

Two things have thrown it off that schedule.

Flying under the American flag, NCL America thought its three ships would
face no competition cruising in the Hawaiian Islands. But foreign vessels,
with lower cost structures, are allowed to stop in Hawaii on cruises from
the West Coast, stopping in Mexico. As it turned out, "this has put
significant downward pressure on our pricing and driven our results into the
red," Veitch said.

When NCL America entered the Hawaiian trade in 2004, there were one million
bed-nights per year, the cruise industry's standard capacity measurement.
"Now there are four million bed-nights," Veitch said. Half are on his
American-flagged ships, the other half on rival foreign vessels stopping in
Hawaii.

Second, developing U.S. crews from scratch has proved difficult. "We
initially had 100 percent turnover - 200 percent in some departments,"
Veitch said. Some of it, he said, was attributed to U.S. workers' having no
cruise-line experience. Many found they did not like life at sea.


Temporary pullback
Faced with continued losses, NCL America will temporarily reduce its
Hawaiian fleet early next year from three ships to two. It also won
permission from Congress for its hospitality crews to be 25 percent foreign
nationals with experience on the company's other vessels.
Veitch said that initial service problems had been fixed and that the
soon-to-arrive experienced foreign nationals would bring improvement and
speed growth.

NCL Corp. is a unit of Malaysia's Genting Group, a global conglomerate that
includes resorts, casinos, cruise lines, oil and gas properties, and
plantations. Its other brands include Star Cruises and Orient Lines.

The United States was towed to Philadelphia in 1996 from Turkey, where its
asbestos had been removed. Its owner at the time, Edward A. Cantor, a
Linden, N.J., real estate developer, hoped that public money to revive the
Philadelphia Naval Shipyard, which had just closed, would be available to
turn the ship into a floating hotel or casino.

That didn't happen. After Cantor died, his heirs were preparing to sell the
ship for scrap or to be sunk as a scuba-diving site when NCL Corp. stepped
up.

Unlike the Queen Mary, now a floating hotel in Long Beach, Calif., the
United States' interior was gutted during asbestos removal. "You can see
from one end to the other inside," Veitch said. Only its four massive
boilers and turbines have been preserved.The skipper of the cruise line that
owns the long silent SS United States says he's not giving up on the ship.

Colin Veitch, chief executive officer of Norwegian Cruise Lines, said in an
interview yesterday that he still believed that bringing the ship back to
life would be "a fantastic project." He has rough-draft plans to maintain
the ship's classic look while adding a deck or two and modern amenities.

In years to come, he said, the storied 55-year-old ship will sail around the
world, make trips from the East Coast to California through the Panama
Canal, cruise the Hawaiian Islands and, possibly, make an occasional run on
its old transatlantic route. And it will earn a profit.

Because of its history, the ship will command premium fares, he said. But
none of that will happen this year - or next.

While NCL Corp. Ltd. has made no announcement about the vessel, which it
bought in 2004, Veitch said that he had no interest in selling the ship and
that a caretaker had been hired to "look after her." He made his comments in
response to a reporter's questions.

Built to wartime standards, in case the United States was needed as a troop
carrier, the thick hull remains strong as the vessel floats quietly at Pier
82, across from the Ikea store in South Philadelphia.

The problems now delaying the ship's return to service can be resolved,
Veitch insists. One big hurdle has been cleared - engineers have declared
that the vessel can be modified to meet modern safety and stability
standards.

The United States is scheduled to be the fourth ship in the cruise line's
U.S.-flagged NCL America Inc. unit, launched in 2004. But that fleet is
still sailing in the red; it was a major factor in NCL Corp.'s $130.9
million loss on $2 billion in revenue last year, compared with $16.2 million
earned in 2005.

Rebuilding the gutted ship for use as a cruise liner would cost about $500
million - more than the cost of a new ship of similar size.

The famed vessel has legions of fans. Web sites and a planned public
television documentary promote its revival. Though its 241,000-horsepower
boilers and turbines have been cold since 1969, it still holds the
transatlantic speed record for averaging nearly 41 miles an hour on its
maiden voyage in 1952.


Done in by jetliners
The vessel was a success at first, but then came the Boeing 707 jetliner,
which whisked passengers across the Atlantic with far greater speed and
comfort than propeller planes.

When NCL Corp. bought the 990-foot-long vessel, it hoped it would be sailing
again by 2006.

Two things have thrown it off that schedule.

Flying under the American flag, NCL America thought its three ships would
face no competition cruising in the Hawaiian Islands. But foreign vessels,
with lower cost structures, are allowed to stop in Hawaii on cruises from
the West Coast, stopping in Mexico. As it turned out, "this has put
significant downward pressure on our pricing and driven our results into the
red," Veitch said.

When NCL America entered the Hawaiian trade in 2004, there were one million
bed-nights per year, the cruise industry's standard capacity measurement.
"Now there are four million bed-nights," Veitch said. Half are on his
American-flagged ships, the other half on rival foreign vessels stopping in
Hawaii.

Second, developing U.S. crews from scratch has proved difficult. "We
initially had 100 percent turnover - 200 percent in some departments,"
Veitch said. Some of it, he said, was attributed to U.S. workers' having no
cruise-line experience. Many found they did not like life at sea.


Temporary pullback
Faced with continued losses, NCL America will temporarily reduce its
Hawaiian fleet early next year from three ships to two. It also won
permission from Congress for its hospitality crews to be 25 percent foreign
nationals with experience on the company's other vessels.

Veitch said that initial service problems had been fixed and that the
soon-to-arrive experienced foreign nationals would bring improvement and
speed growth.

NCL Corp. is a unit of Malaysia's Genting Group, a global conglomerate that
includes resorts, casinos, cruise lines, oil and gas properties, and
plantations. Its other brands include Star Cruises and Orient Lines.

The United States was towed to Philadelphia in 1996 from Turkey, where its
asbestos had been removed. Its owner at the time, Edward A. Cantor, a
Linden, N.J., real estate developer, hoped that public money to revive the
Philadelphia Naval Shipyard, which had just closed, would be available to
turn the ship into a floating hotel or casino.

That didn't happen. After Cantor died, his heirs were preparing to sell the
ship for scrap or to be sunk as a scuba-diving site when NCL Corp. stepped
up.

Unlike the Queen Mary, now a floating hotel in Long Beach, Calif., the
United States' interior was gutted during asbestos removal. "You can see
from one end to the other inside," Veitch said. Only its four massive
boilers and turbines have been preserved.


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Ray

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