The Development and Meaning of Vessel Flags in the Cruise Industry

Abstract

At present, a significant amount of vessels engaged in international trade is flying flags of convenience (FOC), allowing ship operators better terms of competitiveness. This study examines the meaning of vessel flags and FOCs in particular in the specific context of the cruise industry. It investigates factors governing the choice of vessel flags while revealing the reasons behind major cruise lines’ flagging decisions. Building upon a comparative analysis of the development of registered ships per flag State in 1997 and 2008, findings were derived and assumptions tested with the help of interviews conducted with industry professionals. It was found out that the meaning of FOCs in the cruise industry is significant and further expected to increase. Flag States involved in the cruise ship flagging business are mainly found among the quality flags. Reasons behind this motivation are, next to acting responsibly, cruise lines’ own interests, comprising the fear of public pressure and negative press but also the interest of maintaining ship operations which both result in a high level of safety. Furthermore, it was revealed that there is a link between cruise lines’ corporate policy and the choice of vessel flag. However, the major factor in the choice of flag remains costs. cruise market.

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