Budget deals give boost to cruise industry

The plane-load of passengers that took off from Gatwick last night to join an Airtours ship in Tenerife have little in common with the people evacuated from the stricken Royal Viking Sun. But each end of the cruise spectrum, from budget to "five-star plus" luxury, provides evidence of the boom in cruising over the past year.

While mainstream package summer holidays from Britain continue to suffer from bookings below tour operators' worst expectations, the cruise business last year expanded by more than 25 per cent in passenger numbers to over 350,000. One reason is the entry of Airtours to the market, bringing low- price, high-volume expertise to a sector which had previously been the preserve of the wealthy.

Lancashire-based Airtours began cruises in the Mediterranean a year ago. Despite some initial hiccups such as the on-board beer running dry, its operation has been a success. Those Airtours passengers visiting the Canaries and Morocco over Easter have paid pounds 479 each, compared with pounds 21,500 for a world cruise on Royal Viking Sun. A much larger company, the US-based Carnival Cruise Line, has now taken a substantial holding in Airtours.

Britain's biggest tour operator, Thomson, is about to enter the cruise market with a programme mirroring Airtours' approach in Europe. The Disney Corporation has moved in too.

It is currently building two mega-liners in Italy, which will be based in Florida. British holidaymakers are to be offered "stay and cruise" holidays split between Walt Disney World and a Caribbean voyage.

The more established shipping lines say they welcome the new entrants, since awareness of cruising is stimulated. Both P&O Cruises and Fred Olsen Line report strong sales. It is against this background that Cunard last year lost pounds 16.4m.