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NCL Pulls Another Ship From Hawaii

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In a move that we sadly predicted months ago, NCL Corporation (“NCL”) today announced the withdrawal of Pride of Aloha from its struggling Hawaii market effective May 11, 2008. The ship is being transferred to Star Cruises and will be re-flagged and deployed in Asia in the summer of 2008.

The remaining year-round ship in Hawaii will be the larger and newer Pride of America, introduced in 2005, a vessel specifically designed and built for Hawaii cruising. The company announced, and put on sale, Pride of America’s sailings through 2010 offering its popular inter-island cruises departing every Saturday from Honolulu.

Since the announcement a year ago of Pride of Hawaii’s temporary transfer to NCL's European deployment, renamed as Norwegian Jade, the company has embarked on a major fleet-wide initiative called Freestyle 2.0 featuring significant product and hardware upgrades to its modern fleet, including Pride of America. The Freestyle 2.0 program will further enhance the on-board experience taking Freestyle Cruising to the next level. Enhancements include a major investment in the total dining experience; upgrading the stateroom experience; new wide ranging on-board activities for all guests; additional recognition, service and amenities for balcony, suite and villa guests; and the establishment of casual action-station restaurants taking the place of the “traditional” buffet experience. Freestyle 2.0 will be in place on Pride of America and across NCL’s fleet, now the youngest fleet in the cruise industry, by the middle of May 2008.

“Pride of Aloha pioneered the new inter-island market but, as we move forward with Freestyle 2.0 to take our product to the next level across what is already the youngest fleet in the industry, we cannot justify further investment in this ship,” said Andy Stuart, NCL’s executive vice president of marketing, sales and passenger services. “Withdrawing Pride of Aloha was an extremely difficult but necessary commercial decision; however we see a strong future for the long-term flagship in Hawaii, Pride of America. In Pride of America, we have created a commercially successful modern U.S. Flag cruise ship home ported in Hawaii - the first time that has ever been achieved. With Pride of America, we are offering a high quality product, on a world class ship sailing one of the most exciting itineraries available in the industry.

“With today’s announcement of Pride of America’s itinerary through 2010, our guests and travel partners can choose a Freestyle Cruising vacation on a big, modern ship visiting all four main islands and featuring more time to explore ashore than any other cruise line sailing in Hawaii. In the longer term, as demand continues to grow for this premium experience, we hope to bring back our other modern purpose-built U.S.-flag ship, Pride of Hawaii.”

Guests booked on Pride of Aloha

For guests booked on Pride of Aloha from May 11, 2008 and beyond, NCL is holding space and will offer the same cruise fare as they currently have paid on their Pride of Aloha cruise if they would like to transfer to the same week on Pride of America, departing one day earlier. In addition:

• Guests will receive a $100 per person on-board credit (up to $200 per stateroom).

• For guests who made their air and/or hotel arrangements through NCL, NCL will protect the rates they currently have paid and cover any air or hotel change fees.

• For guests who purchased their own air, NCL will protect up to the first $100 per person of any increase in air costs and cover up to $75 per person in air change fees.

• For guests who made independent hotel arrangements, NCL will cover any hotel change fees up to $25 per person.

Guests may book any other NCL cruise and receive a $100 per person on-board credit (up to $200 per stateroom) if they rebook by March 7, 2008. In addition, NCL will cover up to $75 per person in air change fees and up to $25 per person in hotel change fees.

Guests may cancel their cruise and receive a full refund if NCL is notified by March 7, 2008. In addition, NCL will cover up to $75 per person in air change fees and up to $25 per person in hotel change fees. After March 7, 2008 cancellation fees will apply in accordance with NCL’s cancellation policy.

Following a 14-day scheduled dry dock in Hawaii from April 26, 2008 to May 10, 2008, Pride of America will sail its four main island itinerary with a change in order of ports including an overnight in Nawiliwili, Kaua‘i; an afternoon cruise of the breathtaking Napali Coast; Hilo, Hawaii; an evening sail by Mount Kilauea; Kona, Hawaii; and an overnight in Kahului, Maui. All of the Freestyle 2.0 enhancements will be rolled out on Pride of America during the ship’s dry-dock.

Launched in 2005, Pride of America has over 660 balcony staterooms, the broadest range of family-friendly interconnecting cabins available at sea, a choice of nine different restaurants and 12 dining options, multiple entertainment venues, three pools, extensive children’s facilities, an abundance of spacious public rooms, and the largest dedicated meeting facilities at sea. All inspired by the diverse regions of America.

Commenting on the Pride of Aloha withdrawal, NCL’s President and CEO Colin Veitch said: “Our Hawaii business has been extraordinarily difficult, and although we have progressively established a stable operation, delivering a good product in a great destination, the overall price level in the market has been driven down, to a significant degree, by an unprecedented expansion of capacity from low-cost foreign flag ships based on the west coast operating domestic Hawaii itineraries that the Customs Service has indicated are legally the preserve of U.S. flag ships.

“We have invested heavily in U.S. flag cruising in reliance on our nation’s cabotage laws providing a level playing field in Hawaii. Our remaining ship, Pride of America, is generating an encouraging profit now, and we project a continued improvement in this one-ship operation as the unique nature of Hawaii, from a cabotage standpoint, is clarified and restored. In due course, we would then expect, and hope, to be able to grow our U.S. flag business back to two profitable ships by reintroducing Pride of Hawaii.”

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