Apollo, known for turnarounds, has an opportunity on its hands after its Friday, August 17 announcement, reported in the Miami Herald.
But this will be a challenge, even for the crew at Apollo, who have turned around company after company.
First, there is the seemingly impossible task of running American-flagged cruise ships (NCL is the only cruise line to run them) while competitors run non-American crews. That’s no small feat, even with a billion to burn. The second, and bigger challenge; competing with Carnival, and its stable of household name cruise ship brands that includes Cunard, Costa, Holland-America, Windstar, Seabourn, P&O and Princess.
Operation wise, NCL might be able to compete with Carnival, as it has longstanding expertise and market savvy as one of the most innovative cruise lines through the 70s and 80s. The problem is that NCL doesn’t have brands, except for sister company Oceania Cruises, which has little history in the U.S. market. Small boutique lines can compete without brands, but large volume lines like NCL need to differentiate their product lines.
Why is this so critical with cruising? Ships have personalities, and there are many sorts of personalities who like to travel. MBA’s call these folks market segments; we call them rich folks, middle class folks, single folks, WASPS, retirees, college kids and families. Any person on the street could match Carnival’s brands to its market segments, and thus pick which ship they would like to go on. They know Carnival, Cunard, Princess and Holland America. Unlike other travel markets where people are content to be with folks they don’t particularly know or want to know (theme parks, hotels), in cruising, most people like to travel with people like them. Close quarters.
Carnival has the good stuff
So we’ve established that NCL needs brands. NCL’s problem is that all the good brands in existence were bought up by Carnival. Carnival owns the most storied ocean liner brand, Cunard, which still preserves its “White Star” service. Carnival bought Holland America, and later purchased shipping’s crown jewel, the passenger ships of the Peninsular and Oriental Steam Navigation Company, better known as P&O. It was P&O that invented the cruise in the 19th century, and it was P&O that revived it in the 70s with that delicious Fred Silverman and Aaron Spelling number, The Love Boat.
But lucky for Apollo, NCL has two, perhaps three storied shipping brands right under its nose, should it care to exploit this historic legacy. But they would need to bring them back.
One thing that NCL does have is experience in reviving old shipping legacies. NCL’s masterstroke was reviving the S.S. France and rebranding it as the S.S. Norway. Sadly, the Norway had a ship fire, which took it out of service. It never returned. And now, the Norway is stripped, ready for recycling in India, on that famous Alang beach. It would be a stretch to reverse that and put it back in service. But what can be revived is the company behind the S.S. France, the French Lines. Reportedly, NCL rescued the pieces of the S.S. Norway before it went to the scrappers in India. That means that NCL has, in its grasp, some intellectual property relating to French Lines. The French Lines were the pride of France, and today, the trademarks, logos and history of the French Lines are owned by the French Lines Association. In fact, the association licenses the intellectual property of the French Lines under the banner of commercial exploitation.
Why would licensing the French Lines name work so well for NCL? Each time it builds a new ship, it names it Norwegian this, or the Norwegian that. And there is something fitting about associating Norway’s Viking seafaring roots with places like St. Lucia. But the fact is that NCL has about nine Norwegian named ships already, and it’s hard for the average consumer to tell them apart. Luckily for Apollo, the shrewd NCL folks have another new ship on order from a certain French-speaking country, France. A ship named F3 is be delivered in 2009 by Aker Yards, which is known by all in shipping as Chantiers de l’Atlantique. It would make sense to license the French Lines name to this project, and call it Isle de France II or Normandie II.
As if the idea doesn’t make sense, let’s point out a few reasons why it does. First, the United States and France are traditional allies, though have been a bit strained of late. The idea of a French flagged ship traipsing the Caribbean’s French islands like Martinique and Guadeloupe is irresistible to U.S., Quebec and European travelers. And good thing for NCL/Apollo that France has held onto little bits of her empire, including French islands like Tahiti, Corsica and Reunion. This makes for all manner of sellable cruise product in the Mediterranean, Caribbean and Pacific. The French government and its officials would surely help in naming ceremonies and minor marketing assisstance, as a floating palace would be the perfect place to market French wine, French cuisine and France Tourism. Frankly, the cruising market is a bit oversatuated these days, and a hot new product would shake it up.
But there are other possible branding options for NCL/Apollo. NCL, which gained success by its masterstroke in reviving the S.S. France as the S.S. Norway. NCL has a habit of mothballing notable ships. As they say in the publishing world, “They have a great back list.”
The American-flag ship program that NCL America inherited was originally destined to be part of a revived United States Lines, which was a subsidiary of American Classic Voyages. Launched with the support of the Maritime Administration, the now NCL America Pride of America has a ship’s library named after the S.S. America, another famous ship of the United States Lines.
A few artifacts do not a trademark make. But certainly, turning the name Pride of America into S.S. America, and marketing it under the banner of United States Lines, would give the ship a bit of marketing oomph, especially if it pulled into New York. United States Lines ceased passenger operations in 1969, though it was revived oh-so briefly in 2000 by American Classic Voyages, only to shut down the next year. What killed the new United States Lines wasn’t the name, it was undercapitalization and the challenge of buying an aging liner for $114 million from Holland America, the Nieuw Amsterdam, and trying to reflag it American while constructing two new ships.
NCL also has another legitimate link to the United States Lines. It owns the S.S. United States, which has been laid up in Philadelphia for nearly a decade. It is a miracle that the S. S. United States is still alive, and it has a large fan base arguing for its survival. What these folks represent is goodwill, a key part of brand equity. This fan base needs to be tapped and marketed to with the NCL America program, which could easily be re-branded United States Lines for a few hundred thousand dollars invested in brochures, cups, burgees and uniforms.
That still leaves the question of the S.S. United States, and how to bring that old hunk back into service. BrandlandUSA will have to leave that challenge for another day; suffice to say that if the United States Lines are revived as a brand, the vessel United States will have a much better chance at survival. One of the challenges of reviving an old brand is that some younger consumers don’t know it. But good thing about reviving a cruise line brand is that retired folks do know all these companies, and oldsters are the ones who have the cash and time to travel, and would trust these icons with their grandchildren.
Other Shipping Line Brands
NCL has other possible brand plays including American-Export Lines and Grace Lines.
- Available is American-Export Isbrandtsen lines, with their famed Grace Kelly Sun Lane cruises S.S. Constitution and S.S. Independence, shut down in 1973. NCL apparently owns the S.S. Independence, which it inherited with its Hawaii American flag operations. Independence had a long, profitable second life circling the Hawaiian islands as the American Hawaii Cruises. Why not revive the Independence as an American Export liner? It can do some regular runs in Hawaii, and because it is American flagged, stop in ports in the United States along the East Coast and West Coast. For cash and some publicity, it can make an occasional novelty Sun Lane cruise from New York to the Mediterranean around the time of the Cannes Film Festival. Put those reporters for Extra, Entertainment Tonight, EVariety on board for a week with Hollywood’s glitterati, and let the cruise publicity machine begin.
- NCL could also license the Grace name from the W.R. Grace Company. The Grace Lines were well known all through North and South America, founded in 1882. Any sophisticated person over 50 in either continent will associate Grace Lines with luxury and a sort of American style. Grace as a company has been in bankruptcy over asbestos issues, but this problem has nothing to do with the love for the Grace name. The name is not tarnished, except perhaps in a few sue-’em-up trial lawyer offices.
As with any merger, it has unintended consequenses. The most interesting being is having notable art collector Leon Black, Apollo’s legendary founder, in (sort of) charge of one of America’s greatest artistic and enginnering icons, the S.S. United States, as well as a nearly intact modern design icon, the Henry Drefuss ship S.S. Independence. It’s up to you, Leon, as the rumor mill says the Independence is on the way to the scrapper.
So there’s the plan. NCL/Apollo, the parent company of shipping brands that include French Lines, American Export Lines, Grace Lines, United States Lines, Oceania and Norwegian Cruise Lines. These storied brands will sell cruises. And since Apollo’s affiliate company Apollo Investment Corp., or AINV, is publicly traded, that’s a good thing. That’ll get ’em excited at the old Schwab office!