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The cruise ship industry is another business hit hard by the aftermath of 11 September. Already dogged by over capacity, the industry went into a panic as sales plummeted. Consumers had become too nervous to travel or take holidays. Several cruise companies went bankrupt, with large-scale job losses. Others declared that they were merging. The result is likely to be fewer but larger companies.

The first to run aground was Renaissance which filed for bankruptcy on 25 September 2001. The company was known to be struggling as a result of a poor marketing strategy and its eight big and two smaller vessels (with nearly 5,500 berths between them) became stranded in Gibraltar, London and Tahiti. Building on its successful intervention after the Premier cruise line collapsed in late 2000, the ITF launched a rescue operation for the stranded 1,740 Renaissance crew members. Compensation was won and the crew (from at least 52 different nationalities) were repatriated, amid rumours that the vessels would be laid up in Marseille.

Renaissance was followed by American Classic Voyages, the largest US-flag cruise company. In this collapse, 2,150 workers lost their jobs, 450 of them on-shore staff mainly in the US. Royal Olympic, owning seven vessels with 4,000 berths, was also forced to issue a profit warning.

By November two of the three largest cruise companies, P&O Princess and Royal Caribbean, declared they were merging, in a deal worth US$6 billion. Together they will become a massive company owning 41 vessels with 75,000 berths, serving three million customers (in 2000), or 40 per cent of the US market and about one-third of the world market. The merger, discussed prior to September but “even more valuable” afterwards, according to a company spokesperson, was designed to cut costs. The company, whose working title is RCP Cruise Lines, denied this would mean job losses but conceded there would be a rationalisation of office-based administration.

This essentially reduces the cruise ship industry to a duopoly, with two companies controlling 70-75 per cent of the world cruise market. The rival to RCP is Carnival, which has 60,000 berths and is worth over US$15 billion. Meanwhile, Carnival also launched a hostile bid for P&O Princess.

Malaysian-owned Star Cruises is now the third largest cruise company. As part of widespread cost reductions, it has cut staff salaries. One of its subsidiaries, Norwegian Cruise Line, merged shoreside operations with its sister company Orient Lines, and this too has led to retrenchments.

Among the smaller cruise companies left in the market are Crystal (a subsidiary of the world’s largest shipping company, Japanese NYK), Radisson Seven Seas Cruises, and Silversea. Silversea also announced redundancies as it laid up the Silver Wind in Genoa.