AMCV, INGALLS SHIPBUILDING IN NEGOTIATIONS FOR CONSTRUCTION OF CRUISE SHIPS

October 6, 1998 -American Classic Voyages, Inc. (AMCV), and Litton’s Ingalls Shipbuilding division announced today that the two companies are engaged in detailed negotiations for the construction of the first cruise ships to be built in the United States since the late 1950s.

AMCV and Ingalls have formalized the negotiations by signing a letter of intent to develop a design and construction contract in AMCV’s Project America program to build cruise ships to operate in the Hawaiian islands. Because these ships will fly the U.S. flag and operate in the Hawaiian islands, they must be built in a U.S. shipyard.

"We are very excited to work with Ingalls Shipbuilding in a partnership which will revitalize America’s commercial shipbuilding industry," said Philip C. Calian, President and CEO of AMCV. "These state-of-the-art ships will prove the tremendous capability of U.S. shipyards to construct large cruise ships, and they will provide us with modern vessels for the Hawaii cruise market."

"Ingalls is encouraged by the progress of our negotiations with AMCV," said Jerry St. Pe’, President of Ingalls and Senior Vice President of Litton Industries. "Ingalls built the last two U.S.- produced cruise ships. Because of our unique experience in designing and building sophisticated, highly detailed vessels, producing cruise ships like these for AMCV is ideally suited to our facilities, and to the skills of our employees."

The AMCV ships are planned to be PANAMAX vessels (the largest able to transit the Panama Canal). At approximately 840 feet and 71,000 tons, the ships are projected to carry 1,800-2,000 passengers.

Ingalls is supported by cruise ship designer and builder Kvaerner Masa Yards, Inc. of Turku, Finland, for this project.

Details of the ships’ design will be included in the ongoing negotiations. With successful negotiations, a formal contract, for two ships with an option for a third, is expected in early 1999.