American Airlines gives cruise operators an unwanted challenge

AA made the change as post-pandemic travel surges and demand is pushing up airfares.

'Painful increase'

Crew acquisition management costs without marine fares makes for a 'painful increase,' said Larry Pimentel, CEO, Marc-Henry Cruise Holdings, owner/joint operator of Four Seasons Yachts.

AA, he added, is 'a big player in Miami. This probably says something about the robust return of air travel. They don't need this piece of business.'

Industry sources estimated up to 30,000 crew members, or more, could be impacted. Norwegian Cruise Line, for example, employs 18,000 Filipinos. If 8,000 of them have to get to AA hubs like Miami or New York to join their ship, the volumes are substantial.

Since the Philippines and other Asian countries are major suppliers of cruise ship crew, air travel between Asia and North America is likely to shift to other airlines that continue their marine airfare benefits.

Less flexibility

Besides higher costs — though marine fares over the years have crept up and are now more or less in line with the lowest published rates — losing these fares means greater inconvenience and lack of flexibilty. Going by the wayside with AA's decision are two free checked bags for crew, refundability and no-cost changes.

Cruise operators value the flexibility, noting crew travel can change because of visa and medical certificate availability, ship delays and other factors beyond their control.

AA gave notice of its change but due to the carrier's restructuring of its sales support staff, 'nobody was available for clarification, which made the situation more difficult,' according to Tim Davey, founder and managing director, Global Marine Travel, a leading marine industry travel provider.

'The withdrawal of the marine pricing is done and the replacement content via their direct connection is not the same in pricing or in benefits as we had via the marine program, which effectively means that we won’t look at AA as an option for moving cruise line crew in the first instance,' Davey said.

AA to review its decision in a few months

'AA have indicated they will review the impact of their withdrawal of the marine fares in a few months’ time,' Davey continued. 'We at GMT hope they do return the program as their schedules do work well for meeting cruise vessels globally and we’d like to continue supporting AA.'

Meanwhile, cruise lines are concerned other carriers may follow AA's lead.

'We hope not,' a source said. 'There's always been a great relationship between the cruise lines and the airlines. [We're] both good for each other but that relationship may be rethought.'

Airlift is a factor when cruise lines consider turnaround ports, and crew transportation costs figure in.

Rising airfares for passengers are a separate matter. One line told Seatrade Cruise News its sales force is advising customers to book as early as possible, partly to lock in air rates which are projected to continue climbing.

And brands catering to mainsteam customers such as Carnival Cruise Line have always tried to position ships in drive markets to make cruising more affordable.

Drive-market ports flourishing

Some major lines are now filling cabins in drive markets.

During Carnival Corp. & plc's second quarter earnings call this week, CEO Josh Weinstein said his company's homeporting strategy puts nearly 75% of capacity where customers live.

Port Canaveral, which has a hefty drive market, became the world's busiest cruise port in 2022 and during the Canaveral Port Authority's commission meeting this week, CFO Michael Poole reported the facility is on track to exceed its projected record 6.4m multi-day cruise passenger movements this year.

Business savvy or ? 

As for AA dropping marine fares, 'There are those who will see the move as business savvy, and those who will see the move as arrogant. Time will tell,' Four Seasons Yachts' Pimentel said, adding that while demand for air travel is currently robust, 'things can change.'