NCL Corp.'s money-losing Hawai'i interisland cruises will come up for a review next year, when the company will decide whether to continue them.

"The options are two," NCL president Colin Veitch said in an interview. "One is continue the (Hawai'i) business and the other is not to continue the business."

The company says it will decide on its NCL America subsidiary, which operates three interisland ships, by the end of 2008.

NCL has struggled with its Hawai'i interisland operation, losing money the past two years. NCL doesn't break out results for its divisions, but last year the company lost $130.9 million. While its international cruises were profitable, the Hawai'i operations nullified the gains. The company has been reworking its Hawai'i strategy after aggressively adding capacity here.

The company has announced plans to relocate the largest of its three local ships, the 2,466-passenger Pride of Hawai'i, to Europe in February.

The company yesterday disclosed the review of its Hawai'i operations as it announced a pending $1 billion cash infusion from one of the nation's largest private equity companies, Apollo Management LP. New York-based Apollo will become a 50 percent owner of NCL, which will use the money to pay down debt and help expand its operations.

As part of the deal, NCL's owner agreed to review the Hawai'i business and to fund the local operation's losses.

Veitch said he is optimistic the Hawai'i operations will be able to continue.

"Shareholders are very optimistic and enthusiastic about the (Hawai'i) business," Veitch said in a telephone interview from his Miami office. "If that were not the case, it (closing the Hawai'i operation down) would have been dealt with now."

In addition to reducing its Hawai'i fleet by one ship, the company hopes to save money with the help of a change in labor rules. Last year a federal law was changed that allows up to 25 percent of staff to be green-card holders or other visa holders.

Veitch said that change will help the company deal with turnover by bringing in veteran foreign crews. He said last year the company spent $30 million on recruiting, training, documenting and transporting workers. He said the company is starting to see some relief and that cruise prices that had been depressed by too much capacity, looked to be increasing after February.

"We're already seeing in the forward bookings, those beyond February, a much more encouraging revenue picture than we've seen in the last year and a half."

The agreement announced yesterday between NCL owner Star Cruises and Apollo will keep the Hawai'i operations under the NCL brand while Star funds losses.

Veitch said an agreement was needed to cover the Hawai'i operations because it was difficult to value a money-losing operation and because NCL needed time to see if its new local strategy was producing expected gains.

"We believe an unlikely alternative is that the business closes down," Veitch said. A two-ship Hawai'i operation "is going to be a good business."

Reach Greg Wiles at gwiles@honoluluadvertiser.com.