Time up for Olympia Countess

Jan 20, 2004
Author: P&S

The curtain fell yesterday on any remaining hope that the arrested cruise ship Olympia Countess might complete her South African cruise season. Yesterday it was decided the sale of the ship would go ahead next Thursday as scheduled (29 January) after which her future would be up to the new owners.

At the same time Starlight Cruises, which had the ship under charter to undertake a series of summer cruises from Durban, decided to cancel all remaining cruises. Managing director Alan Foggitt said Starlight was left with little alternative and had to act in the interest of clients who had planned holidays with his company. Refunds would be made to those who had made bookings.

He said Royal Olympic Cruises had given Starlight repeated assurances that its financial problems would be cleared up in time for cruises to continue. He said that while he believed the ship owners would ultimately sort out their problems with creditors, it was clear this would not happen during the remainder of the South African cruise season.

The 27-year old ship, which is berthed at Durban’s N-Shed passenger terminal, will be sold by public auction on 29 January. Once the sale is concluded, the nearly 300 crew on board, who have claims against Royal Olympic Cruises for unpaid wages and salaries, will be repatriated.

The amount of ‘collateral’ damage arising from the financial problems of Royal Olympic Cruises has done great harm to the South African travel industry, not only in destroying goodwill and confidence built up over several years, but also in the bank balances of many small travel agents. Many of the latter had already received commissions for selling space on board the cruise ship and now have to repay these amounts.

While this may seem only right and fair business practice, it becomes an unexpected hardship to small companies who have used such income to pay rents, wages and other expenses. The lesson is that it is not only the passengers who have been made to suffer from this financial drama.

Other lessons that may be learned from this debacle are not yet clear, except that passengers booking accommodation on cruise ships (or flights and holidays generally) are always well advised to take out adequate insurance against cancellation of their holidays for whatever reason. No company, no matter how large or long established, should be considered safe from financial embarrassment. Take a look at Italy’s Parmalat as a recent example! (See also the report about Festival Cruises.)

At the same time would-be charterers of cruise ships, of which there are more than one in South Africa, have an obligation to consider the history and background of whichever company they intend using to charter ships. This applies equally to cargo ships as to passenger vessels. Hindsight is a wonderful science, but the signs that Royal Olympic Cruises were experiencing some degree of financial distress have been evident for a long time.

Perhaps Starlight might have been better advised to have remained with the company with whom they had built up a successful relationship and history over a number of years.

NB See next story about Festival Cruises

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