While Norway’s coastal shipping and cruise line Hurtigruten has been plagued by Corona virus-related problems, its new domestic competitor is caught up in trouble linked to Russia’s war on Ukraine. The new Havila Capella remained at the dock in Bergen this week, halted once again by sanctions against Russia.
Havila’s coastal voyage line confirmed that it had to cancel a cruise due to begin on Wednesday (May 4), now because of uncertainty tied to its insurance. “Out of consideration for our passengers … we had to make this decision (to cancel the ship’s cruise to Kirkenes and back), so that the passengers would have time to change their plans to travel to Bergen,” stated Havila’s chief executive Bent Martini in a press release.
He said it was unclear when the trouble would be cleared up. “We’re waiting to hear back from the foreign ministry regarding various solutions we’re working with,” Martini said, “and hope for a quick response.”
The problems that also forced cancellation of another cruise in April are tied to the leasing company for Havila Kystruten, the Norwegian enterprise that ended Hurtigruten’s monopoly along the Norwegian coast. The coastal route was split up to enhance competition, with Hurtigruten ending up with seven ships on the line, down from the 11 it formerly operated. Hurtigruten has re-deployed its newest vessels into so-called “expedition cruises” with destinations including Antarctica, but it’s been plagued by Corona infection that has curtailed service, cancelled port calls and angered passengers this past winter. The problems with Hurtigruten’s expensive Antarctica cruises continued into the spring.
Havila, meanwhile, is due to operate four vessels along the Norwegian coast. So far, though, Havila only has one ship ready to sail, the Havila Capella, and its leasing company that has financed all four Havila ships is owned by Russian lender GTLK. It’s among Russian companies affected by the EU sanctions against Russia since it invaded Ukraine, and they have also been adopted by Norway. The situation is complicated but Havila Kystruten last week won dispensation from the foreign ministry to cruise for six months.
Their vessel that’s due to be joined by three others remains at the dock this week, though, now because of a lack of valid insurance tied to the leasing contracts. “This clearly affects our bottom line when we can’t sail and have passengers who pay to travel with us,” Havila spokesman Lasse Vangstein told state broadcaster NRK on Monday. The company has also been scrambling to refinance the vessel and its sister ships, but that “involves large sums of money and takes time,” Vangstein said.
“Both the company (Havila Kystruten) and the ship are Norwegian, so we comply with Norwegian maritime law,” Vangstein said. “What we need is a license so that also our insurance company is confident we comply.” He said Havila supports sanctions against Russia, but now finds its own situation “challenging,” given its Russian financing.
Norway’s transport ministry is also following the situation closely because Havila is obligated to serve small ports along the Norwegian coast as both a source of cargo delivery and passenger transport. Vangstein claimed Havila is keen to meet its public obligations, for which the state pays. That’s another reason why it’s hoping for a speedy reply from the foreign ministry.
Havila’s entry into the coastal trade has faced many other problems as well, including delays in new vessel deliveries, bankruptcies amongst suppliers and other disruptions tied to the Corona crisis that shut down most travel for extended periods. Havila, based at Fosnavåg in Sunnmøre, also suffered delayed delivery of two of its ships from the Tersan shipyard in Turkey. The company, controlled by Norwegian shipowner Per Sævik and his family, is also working to find alternative financing for its new Havila Castor that’s supposed to join the fleet this spring.
The Havila Capella finally started sailing in December, a year late because of Corona-related restrictions. Havila’s vessels are billed as being environmentally friendly because they’re fueled by both battery and gas and have energy efficient hulls. Food waste has also been reduced.