British billionaire Richard Branson's Virgin Cruises has sailed into early choppy waters as a former CEO of Norwegian Cruise Line accused of pirating business plans and ideas for building "ultra ships."
Former Norwegian Cruise Line CEO Colin Veitch has filed suit against Richard Branson for $300 million claiming that Virgin essentially stole his ideas and business plans to enter the lucrative luxury cruise industry by building a pair of state-of-the-art ships capable of carrying 4,200 passengers each.
When Richard Branson, the entrepreneurial billionaire, announced the formation of Virgin Cruises in December, he promised to “shake up the cruise industry.”
Veitch claims he planned the start-up operation, lined up financing to build the first ship and worked out a tentative commitment with a German shipyard, according to an article by Curt Anderson, legal affairs writer for the Associated Press. Veitch was CEO of Norwegian from 2000 to 2008.
According to the AP, Veitch is asking for $300 million in damages in the lawsuit filed Wednesday in Miami federal court. He is also asking the court to shut down Virgin Cruises.
In a statement, Virgin said: “Richard Branson and the Virgin Group first looked at the cruise market in the late 1970s, and our current team has been exploring the opportunity for more than a decade. Over the years, we have been in discussions with a number of parties including the plaintiff, and those discussions ceased in 2012. We strongly believe the claim has no merits.”
Virgin is banking on the strength of its brand and global name recognition to be able to break into the cruise industry at the luxury end with two so-called ‘ultra’ ships capable of carrying around 4,500 passengers each.
Two such ships are already in service with Royal Caribbean. The first, with a distinctive open aft and tree-lined promenade, was ‘Oasis of the Seas’.
Branson is the founder of Virgin Group, which uses the Virgin brand in its telecommunications, fitness chains, airline and space flight businesses. He now wants to take to the seas, building two 4200-passenger cruise ships aimed at younger travelers.
Branson has a net worth of $US5.9 billion ($7.76 billion), according to the Bloomberg Billionaires Index and ranks as the 233rd richest person in the world.