Cunard battles to restore name name

QE2 passengers sue - and a rival comes into view, writes Mary Braid

FROM THE pages of almost every glossy supplement, Oriana, P&O's new liner, glides tantalisingly into misty view, promising cruises of unparalleled luxury.

Two months before the Queen launches Oriana, the final stages of the company's two-year marketing of "Britain's greatest cruise liner" is under way. A television advertisement heralding the imminent arrival of the ship - 67,000 tons, 600ft long and as high as a 16-storey building - has already been praised as a brilliant celebration of opulence. The ad reportedly cost £350,000 - a mere drop in the ocean compared to the £20 m P&O has invested in the construction and promotion of the ship which will now head its fleet.

With the British cruise market continuing to expand at 15 per cent a year, small wonder that staff at P&O, the market leader, can hardly contain their excitement about the launch of a ship that will carry 2,000 passengers, increase the company's overall capacity by 70 per cent and is forecast to capture 10 per cent of all UK cruise customers.

At the headquarters of Cunard, P&O's nearest rival, the mood must be a little more downbeat. There officials are still on the defensive after the fiasco of the QE2's transatlantic voyage at Christmas with a £30m refit incomplete. Protesting passengers complained that the ship left Southampton resembling a building site.

This week Cunard executives are trying to agree compensation and refunds with customers in Britain. In the US they are facing a class action in which lawyers seek to enlist 540 passengers.

When you are repairing the battered image of your most prestigious vessel, it is galling to know that your misfortune has created optimum conditions for the launch of the opposition's flagship. Even the name Oriana must irritate. Elizabeth I was likened to the eponymous mythical princess by poets and musicians. Rehabilitating the QE2 cannot be easy in the midst of the launch of a ship linked to QE1.

Not that anyone at P&O is gleeful. "We are just concerned with the launch of the Oriana," said a spokeswoman. "We wouldn't comment on Cunard."But passengers on the QE2 Christmas cruise are less reticent. Peter Ludlow insists Cunard's handling of the fiasco has hardly improved. "They are making different offers to different people and they seem to think we are not talking to each other."

Mr Ludlow has two weeks to decide whether to accept a refund of £7,500 for the trip he took with his fiancee and a voucher to equivalent value for the pleasure of taking to the high seas again with the company. "We got our original cruise at considerablediscount. We would have to spend about £6,000 more of our own money to go on another comparable cruise."

If he does take to the water again it will not be with Cunard. He has seen the Oriana ads boasting state-of-the-art leisure facilities, countless restaurants, Viscount Linley furniture and works of art in every room. "It looks a lovely ship," he says.

A study about to be published by market researcher Mintel shows how keen the competition for cruise customers has become. It reports that the UK market has risen 80 per cent in five years to become the second biggest after the US. It now attracts 302,000passengers annually and is worth £380m a year. As more people are converted to cruising, the big companies are spending heavily to establish their brand names.

Keith Betton of the Association of British Travel Agents says the market is swelling due to an increase in "empty-nesters". "We have an ageing population which is retiring earlier and better off. They want to see the world in a relaxing and safe way. "