Ingalls to Build 2 U.S. Luxury Cruise Ships

Litton Industries Inc.’s Ingalls Shipbuilding division has agreed to build the first large cruise ships in the United States in more than 40 years for American Classic Voyages Co., in a deal with a potential value of $1.4 billion, the companies said Tuesday.

Ingalls will build two 1,900-passenger U.S. flag cruise vessels at its shipyard in Pascagoula, Miss., and has an option for a third vessel. The first ship is scheduled to enter service for cruises among the Hawaiian Islands in early 2003.

The base price of the two ships is $880 million, not including incentive payments available to Ingalls.

Woodland Hills-based Litton and Chicago-based American Classic credited the deal to passage of the U.S. Flag Cruise Ship Pilot Project Statute in 1997. The law is aimed at sustaining and revitalizing U.S. shipbuilding, creating jobs in the industry and boosting tourism.

Litton shares rose 6 cents to close at $56.94 on the New York Stock Exchange and American Classic fell $1 to close at $20.50 on Nasdaq.

The contract contains options that could result in up to six ships being built.

The first two ships will be state-of-the-art luxury cruise vessels, each about 72,000 gross tons and 840 feet long.

Ingalls delivered the last American-built large cruise ships, the Brasil and the Argentina, to Moore McCormack Lines in 1958.