Important note: after this article was written a series of new information came forth leading to updated articles: Here are the links to those articles: Windjammer - End of anEmpire
10-31-07: Windjammer Update: We Need a Hero I just spoke to a member of the Burke family regarding the current Windjammer situation. Susie, sister of Joey who is now in charge of the company, called me to respond to the newsletter we posted yesterday about our concern for Windjammer.
Joey Burke is her brother, and he just recently took the reins of the company. Yesterday, Cruisemates posted a newsletter in which we said we were doubtful the cruise line would be able to come out of its current crisis, and we had to recommend that people not buy Windjammer cruise tickets. While I still cannot recommend it yet, I will say that I find their prospects for recovery much better than I had previously considered, IF (and "if" is a big word) they can find the right financial solution to their problems.
To summarize what Susie tells me, Windjammer does have a plan of execution for bringing the campany back. What they do not have is a lot of cash, but they are actively seeking someone who can come to the table with a cash infusion, and also bring cruise ship operations skills to the table.
"The last six months have been devastating for the family," says Susie. "We lost our dear brother Danny last March (07), and at age 47 he was the one family member who was most actively involved in running Windjammer." Since Danny passed away, we lost our focus and didn't pay enough attention to the company, until now."
The father of the family, Michael Burke, started Windjammer Barefoot Cruises 60 years ago. He ran the operation himself until he became too sick to continue. Running the company was left to his children in the form of a trust, but most of them did not take an active enough interest, I was told.
The trustee is a David Harris who resides in the Isle of Mann (U.K.). Susie says that the family knows and trusts David, but that David was never the operations manager for Windjammer, and he isn't qualified to be one. Since the loss of Danny, managerial duties were being done by a board whom Susie suggests had the wrong focus. Trustee Harris just changed that, and put her brother Joey in control of the Cruise Line.
Joey Burke has now come forward with public statements on his plans to turn the company around, and though the task appears somewhat daunting right now, the family claims their first priority is a renewed committment to their customers first.
Right now just one of the four cruise ships the company owns, the Legacy, is in service. Reservations are being taken for that ship now, the next sail date being November 3rd. The ship sails out of Costa Rica. The other three ships have been out of action since late September.
According to Susie, all of the upcoming Legacy cruises are being filled mostly with "make-up" cruises for people who paid and did not receive their cruise. Reservations are not being taken for the other ships, yet, though Susie says the company is working hard on needed maintenance and hopes to have all four sailing by April at the latest. She even said "optimistically, we think February is possible, but we do not want to make any promises we cannot keep."
As for promises, Susie says, "Joey is serious about making sure every person who paid for a cruise will get their cruise, it is just a matter of when we can accomodate them." She is upset that the company has been plagued by "rumors" posted online, and that a few disgruntled passengers have been making a lot of noise in several places about not getting a requested refund. The idea she wants to impart is that "Windjammer is not trying to rip anyone off. We care about making good to all of our passengers, all we are asking for right now is their patience."
So, how good are the prospects? One thing Susie mentioned for the first time is that Windjammer is actively seeking a new "partnership". They would welcome the sort of cash and management experience infusion that was recently given to NCL, for example, though they do not need nearly as much money. In addition, all four ships are fully paid for, unencumbered, and the company does not have any other outstanding financial liabilities. According to Susie, the only financial obligations they now have are "the advance bookings that haven't sailed yet, and a few vendors, but so far the vendors are being very understanding." Joey has made statements that the crew has been paid.
While I did not get the impression that Windjammer currently has the necessary cash flow to weather this storm alone, I was encouraged to hear Susie say that they have renewed efforts to find the "right" partner. I am also encouraged that the hole is not as deep as it could be.
Susie says that rumors that the ships were dark and bare were overblown. "All four ships were fully provisioned as recently as September -- they were ready to cruise." When I asked why they didn't sail she said the answer was "complicated, but lets just say it had more to do operational problems than cash flow." Then, with the recent cancelled sailings and lack of incoming revenue, the situation deteriorated more rapidly than anyone thought it would, which has been "devastating" to the entire family.
As for how thing s got so bad so quickly, Susie said, "Once again, the family was too devasted to think, and I guess we set our hopes on the "wrong" people to fix this mess. When those people did not come through it was a "wake-up call" to all of us Burke children that we need to give the matter more serious attention right away. What we need is an investor with ship operations experience, someone who can get our ships in shape and make sure we deliver what we promise."
As editor of CruiseMates, I have to say that while yesterday I had my doubts, today I believe it is possible they can turn the company situation around IF we hear news soon that they have partnered with someone who truly knows cruise operations, and has the financial assets to pull them out of this hole.
I did not get the impression they have the deep pockets within the family itself to fix the problem. As of yet, they still cannot sell airfare which requires posting a bond. But the good thing is that all four ships are paid for, unencumbered, and the company has no other outstanding debt, according to Susie.
So, what does CruiseMates recommend now? A "wait 'n see approach." If I had purchased a cruise and lost my money, I would try to reschedule it and see what happens. Maybe I would get a cruise on Legacy after all. I still can't say "buy those Windjammer tickets now while they are on sale!" but if I hear they have the right new partner, then I might say that.
Cruise lines have gone under due to mismanagement before, and they have come back. Renaissance Cruises tanked when Ed Rudner was at the helm, but when Oceania Cruises emerged with almost the same management (minus Rudner) and leased back the same ships, they were an unbridaled success. Operations is key.
The Burkes have been through some very tough times lately, losing their beloved brother in March and now coming close to losing a business that has been in the family for 60 years.
I wish Windjammer and the Burkes the best.
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