Pascagoula ... World’s Burgeoning Cruise Capitol?

SeaAmerica, pending Title XI funding, plans for pair of 42,000-ton vessls

Litton Ship Systems' Ingalls Shipbuilding division, located in Pascagoula, Mississippi, has signed a Memorandum of Agreement (MOA) with SeaAmerica Cruise Lines, Inc., based in Hollywood, Fla.

Under the MOA, Litton and SeaAmerica will develop a ship design leading to contract negotiations for the construction of two 42,000-ton, 1,000 passenger cruise ships. The program will include options for two additional ships.

Construction of the cruise vessels would utilize both of Litton Ship Systems' production facilities — Litton Ingalls Shipbuilding in Pascagoula and Litton Avondale Industries in metro New Orleans, La., and maximizing the resources and experience of both shipyards to achieve operating synergies.

"SeaAmerica anticipates receiving MARAD Title XI financing for our new program,'' said David W. Turner, SeaAmerica chairman and COO. "These U.S.-built, U.S.-crewed ships will be operated port-to-port within the U.S., targeted at the convention and business market, in addition to leisure travelers."

"This new opportunity clearly validates Litton's assessment of the growth potential of the U.S. cruise ship market," said Jerry St. Pe, Litton executive vice president and COO of Litton Ship Systems. "This program presents an opportunity to grow this segment of our company's business beyond the ships already under contract."

SeaAmerica Cruise Lines, Inc. has been organized to own and operate a U.S. flagged cruise line — primarily sailing U.S. port to U.S. port to meet the demands of the business meeting and convention business, as well as the leisure cruise traveler. A business conference aboard a U.S.-flagged cruise ship may allow individuals to take a tax deduction for conference expenses. A business expense tax deduction for conference attendance aboard a foreign-flagged cruise ship is specifically not permitted.

Accommodations will include 87-percent outside cabins (most with private balconies), one of the most luxurious spas afloat, full theater, both hospitality and luxury suites, casino, and alternative dining options. Uniquely, the SeaAmerica vessels will also offer the most elaborate and multi-functional conference center facilities ever offered on a cruise ship.

In March 1999, Litton Ingalls Shipbuilding signed a contract with American Classic Voyages Co. (AMCV), worth a potential value of $1.4 billion, to build two 1,900-passenger cruise ships, with an option for a third. Construction of the first ship will begin in July 2000, with delivery scheduled in early 2003.