Star Cruises sinks into losses

The country's first luxury cruise shipping venture, Star Cruises, has sailed into losses. The world's third largest cruise liner had launched its luxury ship SuperStar Libra in September 2005 with Mumbai as its homeport (originating from and terminating in Mumbai).

According to highly placed sources, the anomalies in taxes on the cruise operator, coupled with a 50 per cent load factor, have led to a loss of over Rs 75 crore (Rs 750 million) in the last cruise season.

"The domestic cruise season is between October and May. Though Star Cruises is trying for a turnaround, the operator is likely to post losses in the current season too. The current season is between October 2006 and May 2007," sources said.

Jean Teo, senior vice-president, sales and marketing, Star Cruises, confirmed the losses made by the carrier adding, "We still believe in the domestic tourism potential in this country."

"The main reason for the losses is the various taxes imposed by the government. We have requested the government to waive excise duties and other taxes imposed on cruise tour operators as is done in Singapore," Teo said on the sidelines of a tourism seminar organised by the Confederation of Indian Industry.

Following the poor load factor, Star Crusies is currently in the process of modifying the itinerary by withdrawing long cruise trips to various destinations.

For instance, SuperStar Libra has withdrawn four-night destination cruises to Kadmat (Lakshadweep) and Goa. "Instead, we are operating short cruises, which are popular among Indians. Over 90 per cent of the passengers are Indians, whereas local traffic constitutes only 60 per cent. Instead, we are operating short cruises," said Teo.

"Tourists are not coming only for cruises. They are coming to visit other places also. Lack of infrastructure for related travel is hurting domestic cruise plans," industry sources said.

Teo said Star Cruises' Singapore and Hong Kong operations are making profits and the company is planning to start operations in Taiwan.

Meanwhile, the government has set up a high-powered steering group on cruise shipping under the ministry of shipping and the ministry of tourism to give a final shape to the cruise shipping policy.

This group will finalise various policies concerning taxation, immigration, connectivity and identification of ports to be developed for cruise shipping and issues related to customs.