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Cruise Briefing


Suit calls fuel charge a price-fixing scam

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Feb 24, 2008

Typically, this column stays away from insider industry blather - "Leviathan Cruise Line recently named Dewey Cheatum as Deputy Vice Assistant President in Charge of Marketing and Vacuum Flush Toilet Satisfaction" - opting instead for information that helps consumers make better decisions about buying and enjoying cruises.

That said, what follows are a couple of industry developments that bear serious watching: They'll likely affect your choices of future cruises and how much you'll pay.

Feeling fuelish: Remember in November when all the cruise lines started charging passengers extra for fuel? Did you notice how they all did it at the same time?

Other folks noticed it, too.

Fuel surcharges by the major lines, including Carnival, Royal Caribbean and Norwegian Cruise Line, are the target of a review by Florida's attorney general, as well as a class action suit filed on behalf of customers who paid the charges that the suit called part of a price-fixing conspiracy, according to a Lloyd's List report.

Cruise lines announced the surcharges - ranging from $5 to $20 a day per cabin depending on cruise line and number of passengers - based on rising international fuel prices. The suit, however, states that the lines had hedged against that increase and used the surcharge as an opportunity to jack up prices without changing the advertised price.

According to Lloyd's List, the suit states: "Defendants entered into a cartel and implemented surcharges that do not bear a direct relationship to their actual increased costs associated with rising fuel prices."

What's it mean to you? The lines might remove the surcharge or, if you sailed within the past two months, you could get a check in the mail - but don't hold your breath. In the meantime, feel free to call each cruise line and say, "I was planning a cruise, but I refuse to sail with (enter company name) until you remove the fuel surcharge."

It's worth a shot, anyway.

Rules of the waves: A new interpretation of an old maritime law that would likely slash cruise traffic on the West Coast (among other regions) is coming under heavy fire, according to San Francisco port officials, and federal officials and cruise lines might be working on a compromise.

The Homeland Security Administration's Department of Customs and Border Protection, under lobbying by Norwegian Cruise Line, was considering an interpretation of the 142-year-old Passenger Vessel Services Act that would effectively kill most West Coast and competitors' Hawaii cruises by forcing ships registered to foreign countries to spend at least 48 hours in a foreign port if they visit more than one U.S. port.

Peter Dailey, maritime director for the Port of San Francisco, said the federal agencies "were surprised by the outcry they received because of this interpretation."

The rule change was aimed at eliminating competition for Norwegian's U.S.-flagged ships in Hawaii, but it was so broad many other markets were affected.

The feds and cruise line officials are likely negotiating, Dailey said, to narrow the restriction to apply only to ships that "get around" the requirement to visit a foreign port by making a perfunctory stop at Ensenada, Mexico. Even that, Dailey said, would likely cut traffic to San Francisco

The best way for the public to weigh in (including everyone who e-mailed me about it) is to send a note to Sen. Diane Feinstein (feinstein.senate.gov/public, click on "Contact Diane") and Rep. Nancy Pelosi ( www.house.gov/pelosi, click on "E-mail Rep. Pelosi").

Ironically, after making such a fuss about foreign competition and getting the rule changed, Norwegian has decided to pull yet another U.S.-flagged ship out of Hawaii, leaving just the (wait for it) Pride of America to sail island-hopping cruises that don't require a stop at a foreign port.

Norwegian will transfer Pride of Aloha in May to parent company Star Cruises to sail in Asia this summer under a foreign flag. Pride of Hawaii, the third U.S.-flagged ship Norwegian placed in Hawaii, has been reflagged and renamed Norwegian Jade, and will sail in Europe.

sfgate.com

Suit calls fuel charge a price-fixing scam
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