Southwest, Cruise Line End Contract Dispute

As expected, Southwest Marine and Miami-based Royal Caribbean Cruise Ltd. on Tuesday settled a contract dispute, clearing the way for more than 1,000 Southwest employees to return to work to complete a $75-million renovation of the Viking Serenade cruise ship.

“We called a lot of people back during the first part of the week, and they should all be back on Wednesday,” Southwest spokeswoman Jacqueline Kreisler said Tuesday. The work stoppage that began April 19 also stalled several contractors involved in the massive refurbishing project.

Royal Caribbean on April 23 announced that the disagreement had led to the termination of the $75-million contract. At that time, the Miami-based cruise operator indicated that it was looking for another yard to complete the renovation.

Maritime industry observers have described the contract as the largest commercial cruise ship repair contract to be won by a U.S.-based shipyard in 30 years. The extensive refurbishment includes the addition of nearly 300 cabins, a new bow, a huge disco and expanded galley and dining facilities.

Southwest has been working on the renovation since January. The work stoppage has cast doubt on whether the ship, which arrived at Southwest’s bayfront yard in January, will be ready for a scheduled return to service June 17. Representatives for Southwest and Royal Caribbean declined to comment on when the ship will return to service.

The Viking Serenade contract is important to Southwest because it has helped to replace work that is being lost as the Navy reduces the size of its fleet. In recent years, Southwest and other U.S. yards have grown almost totally dependent upon government repair contracts, as most commercial work has been lost to foreign yards.