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Cruising s Salty Seadog Learns New Tricks Tradition-steeped Cunard takes aim at high-end market with new-age gusto m by Bridget Murphy, senior editor July, 1997 23 Cruise shippers be warned: It f would be a grave miscalculation to characterize Cunard's Chief > Executive Antti Pankakoski as anything but a very cool customer. Don't let his charming, easy-going manner hoodwink you; after all, he is a veteran of the Norwegian- owned Kvaerner industrial empire and he does mean business. Under his sturdy guidance, Cunard has steamed back to the front and center of the cruise industry in recent months, suc- cessfully emerging from a series of at-sea mishaps, unlucky business tides and a change in ownership that temporarily waylaid the com- pany's competitive stance in the luxury sector niche. A focused business plan, com- bined with the now-unwavering support of new parent company Kvaerner ASA and rising stock prices have boosted the cruise line's image in the public eye, and concurrently, its positioning in the sector. Revamping A Sullied Reputation In August 1996, The New York Times profiled then-Cunard CEO Peter Ward as the force which would rescue the cruise line from a pattern of "rudder- less management," in order to win the con- fidence of new own- ers who had already tried to sell off the business after acquir- ing previous owner Trafalgar House's assets in April of the same year. Ward's goal was to reposition the compa- ny as a leader in what was a slowly maturing and quickly consolidating mar- ketplace. This was to be no easy task considering the sector-wide intense battle for first-time cruisers, the 1994 QE2 voyage which resulted in a payout in the millions to passengers after the flagship sailed prior to a refit comple- tion, a fire aboard Sagafjord which stranded passengers in the South China Sea and Royal Viking Sun's Red Sea reef encounter, which pre- empted a world cruise. Fifteen months after putting a sensible and con- temporary business strategy in place, the former Rolls- Royce chief jumped ship and market insiders once again held their breath as Cunard prepared for yet another tor- rent of bad press and sale negotiation rumors — rumors which proved to be more than just hearsay. In November 1996, Kvaerner sac- rificed its dually-appointed Shipbuilding vice president and Kvaerner Masa-Yards executive vice president to Cunard manage- ment in what appeared to be a last- ditch effort to bring the cruise line into a pattern of predictable prof- itability. When Finnish-born Pankakoski assumed leadership at this time, Kvaerner was still considering dumping the cruise line, although negotiators balked at the near $600 million invest- ment ($325 million for the five-ship fleet and a $240 to $250 million commitment to build a ship at its Finnish yard) demanded by the owners. Break-Out Plan Synergizes Strengths Contrastly, seven months later, a bullish outlook on the company's business prospects prevailed at Cunard headquarters in New York City. The cruise line's all-impor- tant customer ratings had steadily (Continued on page 26)
