Page 26: of Maritime Reporter Magazine (July 1997)

TfiilSitfj And

Cruisings Salty Seadog Learns New Tricks (Continued from page 21) climbed, Kvaerner's sale intentions seemed to have been shelved and Antti Pankakoski sat down with MR/EN to speculate on events in his company's recent past and to divulge his views on the apparent turnaround. First order of business: details on the Cunard reorganiza- tion strategy. "Definitely our intention is to give good value for the dollar. The product is a luxury product, but it should always give good value for the dol- lar spent," said Pankakoski, explaining that an important element of the company's strategy was decided a few years ago when Cunard determined it would "concentrate on the luxury end."

At this time the company also sold off certain ships, launched aggressive sales and marketing campaigns and improved service onboard, rein- forcing the corporate mission of growth through refurbishment and strategic marketing agree- ments. "The process that he (Ward) and the team started — I do share their views and strategies.

He and the team here (New York) started a lot of good initiatives. Basically, we're following the same lines, with a few differences," said

Pankakoski.

The main tenets of the plan call for mainte- nance of a five-ship fleet, superior management shoreside, the best passenger service seaside and a peaked emphasis on all that exudes lux- ury. The seasoned observer would also add

Cunard's engagement of a new public relations firm, the company's increased internet presence and the cruise line's absolute commitment to the highest vessel maintenance standards to the mix. "The ships are up to the highest modern standards. They have been well maintained.

We have a refit every two years so as to make sure we keep up with the state-of-the-art," said the Cunard execu- tive.

Pankakoski also spoke about Cunard's information technology (IT) efforts, specifically in the areas of revenue management and shoreside reservations, stressing: "We're really trying to bring this company up to date.

We're working on a number of initiatives at the same time. In order to maintain and improve our position, it goes without saying that you have to." "I think we've seen some results based on higher '97 profits," said Pankakoski, adding: "The company is moving and the company is moving now in the right direction.

Management-wise, we've been able to stabilize the company." He also said that keeping

Cunard's senior management concentrated in

New York as opposed to a split with London seems to have effected a better exchange of information, which is "much, much better from a team point of view."

To Sell Or Not To Sell

In mid-May 1997, Kvaerner shares surged seven percent based on the company's higher than predicted earnings for Ql. Reported profits of $62 million included funds earned from the divestment of shares in

Norwegian shipping group Bergensen and

Britain's Amec pic, inter- ests which were deemed sellable as non-core assets. Market watchers wondered if these trans- actions spoke volumes concerning Cunard's fate.

Pankakoski was willing to clear the air somewhat in this regard.

This operation is still being regarded as a so-called non-core asset. At the same time, we have the full support of

Kvaerner at all times ... They have approved every measure we have proposed,"

Pankakoski confided to MR/EN, squelching, if temporarily, gossip about parent company ownership misgivings.

Indeed, Kvaerner has been generous in approving Cunard's proposed measures, which according to the Cunard chief, account for a $40 million tab which will go towards funding work on the line's five ships for just one year (December 1996 to December 1997).

Pankakoski also has his own measures in mind for increasing market shares and ensur- ing Cunard's dominance at the high-end niche of the cruise sector for years to come. He told

MR/EN that his goal for 1997 is to reach full capacity utilization, and this goal doesn't seem far off as the year's bookings are solid. "In '97, the ships will be relatively full throughout the year," said the CEO.

After the goal of sailing full ships is realized,

Pankakoski said that he will not overlook the possibilities of building new ships, exploring mergers or acquiring existing fleets. On the subject of newbuilding, this shipbuilder by pro- fession confided: "I think that would be the likely way to go. I would hate to exclude the notion of doing something with another line or acquiring existing ships. Building a new ship is always a very attractive option."

Poised For Success In Global Market

The failure of several smaller cruise lines in 26 Maritime Reporter/Engineering News