Ambassadors International, the US based company that owns Windstar, has tried hard to sort out its house and exit all other businesses save for Windstar itself. Until recently, the listed company owned US flagged coastal cruising vessels, designed marinas and was involved in the event organisation business as well – hardly a mix that one could say offers obvious synergies.
This was understood by the Ambassadors management as well, but while focusing on Windstar may be the right way in the short term, in years to come Windstar itself is likely to face a problem that is common to many an operator of small, niche vessels: ageing fleet.
Windstar has three ships, the 5,350 gross ton Wind Spirit and Wind Star were built in 1988 and 1986 respectively, while larger 14,745 gross ton Wind Surf was originally built for club Med in France in 1990 and acquired second hand by Windstar. The two first-named shiop cost $34.2 million to build, while the larger vessel was also much dearer, costing $140 million to construct.
All these ships should have a fair bit of life in them. As a rule of the thumb, cruise liners are depreciated roughly over 30 years, but in fact their life cycle tends to extend well beyond that. Nevertheless, at some point all ships become due for recycling.
It is difficult to think that Windstar would be able to find a yard that can deliver adequate quality at an acceptable price should it want to replace the three vessels with anything similar. Capital expenditure tends to rise faster than revenue when a small company enters the newbuilding sector: this was shown in the case of Celebrity Cruises and Costa Crociere in the latter half of the 1990s.
So, is Windstar a lost case? At least for quite some time into the future it should not be. However, in the long term it faces a problem that many small operators of niche cruise vessels are facing too yet none of which appears to have found a solution and that is the economic dilemma of fleet renewal.
Perhaps Yachts of Seabourn, the luxury brand owned by Carnival Corp & PLC offers an indication which way to go: their latest trio of ships carry 450 passengers, more than twice the figure of their original threesome, while their 30,000 gross ton size is three times that of the older ships.
So far so good – but then arises the question if the product remains the same if you increase the size of your ships by so much. And the answer is that it most likely does not.
Tuesday 26 January 2010
Friday 1 January 2010
A new dimension in Somali piracy
If I had to pick one area where the international comminuty has failed to act, my number one choice would be the issue of Somali pirates. Oh yes, there are warships of various nations there pretending to protect shipping. However, due to the impotence of politicians in Europe in particular, these patrols are little more than a joke.
And yet, this whole issue could be assuming a new dimension. Media reports say that a Chinese admiral has aired the thought that the country acquire a naval base in the region as its warships have had to spend up to four months at sea to provide protection for merchant vessels flying the Chinese flag in the absence of a base.
But let us look at the European Union's deplorable failure first. A Dutch warship captured a number of Somali pirates, but nobody wants to take them for a trial, so they may have to be released. The German navy, whose actions seem have been the most lethargic, does not even chase pirates, but only take action if alerted to do so.
No wonder the pirates feel free to roam the north western part of the Indian Ocean as they please. The worse that seems to happen if captured by an European warship is that their weapons are dumped in the water and they are allowed to go. Things might be very different if the rules of erngagement were relaxed to allow captains opf wartships to seek and destroy pirate vessels and send the pirates themselves to the depth with their vessels.
Of course, in this age of quangos backed by the soft political left, this would be unthinkable: the human rights of the pirates come first. As usual, the left seems to pay little attention to the sufferings of victims of crime, in this case piracy, as it lavishes understanding on criminals themselves.
But let us not forget the Chinese admiral. This is not the first time that China is reported to be looking for a naval base in the region and Pakistan has been cited as a candidate country that might provide it with one. If this were to happen, eyebrows would certainly be raised in the corridors of power in New Delhi.
At the moment, the US, UK and France have permanent naval presence in the Arabian Gulf and Gulf of Aden, the two first-named countries have bases in Bahrain, while the French have one in Djibouti. In addition, the Western Fleet of India, which is based in Mumbai, is a force to be reckoned with. In the next few years, the Indian navy will receive two new aircraft carriers to replace a single, ageing vessel of this type, in addition to other types of ships.
If Somali pirates prompt China to obtain a naval base in the Gulf of Aden or Arabian Sea, the issue that has so far worried merchant shipping will assume an aspect of far wider, political context. The pirates would give China a perfect excuse to seek permanent presence in the region, which would certainly raise concerns in India and perhaps elsewhere too. At the moment, the Chinese navy does not possess overseas bases.
As far as the pirates are concerned, the time has come to blast them from the waves by gunfire and accept that there will be even a high number of casualties amongst them as a result. When the Royal Navy cleared the seas from this peril in the 19th century, it was not done by lectures about human race but by pure force.
And yet, this whole issue could be assuming a new dimension. Media reports say that a Chinese admiral has aired the thought that the country acquire a naval base in the region as its warships have had to spend up to four months at sea to provide protection for merchant vessels flying the Chinese flag in the absence of a base.
But let us look at the European Union's deplorable failure first. A Dutch warship captured a number of Somali pirates, but nobody wants to take them for a trial, so they may have to be released. The German navy, whose actions seem have been the most lethargic, does not even chase pirates, but only take action if alerted to do so.
No wonder the pirates feel free to roam the north western part of the Indian Ocean as they please. The worse that seems to happen if captured by an European warship is that their weapons are dumped in the water and they are allowed to go. Things might be very different if the rules of erngagement were relaxed to allow captains opf wartships to seek and destroy pirate vessels and send the pirates themselves to the depth with their vessels.
Of course, in this age of quangos backed by the soft political left, this would be unthinkable: the human rights of the pirates come first. As usual, the left seems to pay little attention to the sufferings of victims of crime, in this case piracy, as it lavishes understanding on criminals themselves.
But let us not forget the Chinese admiral. This is not the first time that China is reported to be looking for a naval base in the region and Pakistan has been cited as a candidate country that might provide it with one. If this were to happen, eyebrows would certainly be raised in the corridors of power in New Delhi.
At the moment, the US, UK and France have permanent naval presence in the Arabian Gulf and Gulf of Aden, the two first-named countries have bases in Bahrain, while the French have one in Djibouti. In addition, the Western Fleet of India, which is based in Mumbai, is a force to be reckoned with. In the next few years, the Indian navy will receive two new aircraft carriers to replace a single, ageing vessel of this type, in addition to other types of ships.
If Somali pirates prompt China to obtain a naval base in the Gulf of Aden or Arabian Sea, the issue that has so far worried merchant shipping will assume an aspect of far wider, political context. The pirates would give China a perfect excuse to seek permanent presence in the region, which would certainly raise concerns in India and perhaps elsewhere too. At the moment, the Chinese navy does not possess overseas bases.
As far as the pirates are concerned, the time has come to blast them from the waves by gunfire and accept that there will be even a high number of casualties amongst them as a result. When the Royal Navy cleared the seas from this peril in the 19th century, it was not done by lectures about human race but by pure force.
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