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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________________

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 0-9264

AMERICAN CLASSIC VOYAGES CO.
(Exact name of registrant as specified in its charter)

DELAWARE 31-0303330
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) identification No.)

TWO NORTH RIVERSIDE PLAZA, CHICAGO, IL 60606
(Address of principal executive offices) (Zip Code)

(312) 258-1890
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]

As of August 3, 1998, there were 14,097,055 shares of Common Stock outstanding.

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AMERICAN CLASSIC VOYAGES CO.

INDEX

ITEM DESCRIPTION PAGE
- ---------------- ----

Part I. Financial Information:

Item 1. Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Statements of Operations for
the Three Months and Six Months Ended June 30, 1998
and 1997............................................... 3

Condensed Consolidated Balance Sheets at June 30, 1998
and December 31, 1997.................................. 4

Condensed Consolidated Statements of Cash Flows for
the Six Months Ended June 30, 1998 and 1997............ 5

Notes to Condensed Consolidated Financial Statements... 6

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 9

Part II. Other Information:

Item 1. Legal Proceedings...................................... 15

Item 4. Submission of Matters to a Vote of Security Holders.... 15

Item 5. Other Information...................................... 15

Item 6. Exhibits and Reports on Form 8-K....................... 15

AMERICAN CLASSIC VOYAGES CO.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------- ------------------
1998 1997 1998 1997
--------- -------- ------- -------

Revenues...................................................... $53,535 $42,356 $94,203 $82,728

Cost of operations (exclusive of depreciation expense shown
below)...................................................... 32,973 24,695 62,432 51,834
------- ------- ------- -------

Gross profit.................................................. 20,562 17,661 31,771 30,894

Selling, general and administrative expenses.................. 12,292 10,657 25,388 22,176
Depreciation expense.......................................... 4,233 3,553 8,489 7,136
------- ------- ------- -------

Operating income (loss)....................................... 4,037 3,451 (2,106) 1,582

Interest income............................................... 263 251 514 519
Interest expense.............................................. 1,686 1,740 3,356 3,453
Other income.................................................. -- -- 300 --
------- ------- ------- -------
Income (loss) before income taxes............................. 2,614 1,962 (4,648) (1,352)

Income tax (expense) benefit.................................. (1,040) (785) 1,860 541
------- ------- ------- -------

Net income (loss)............................................. $ 1,574 $ 1,177 $(2,788) $ (811)
======= ======= ======= =======

Per Share Information
Basic:
Basic weighted average shares outstanding................. 14,120 13,940 14,094 13,925
Earnings (loss) per share................................. $ 0.11 $ 0.08 $ (0.20) $ (0.06)

Diluted:
Diluted weighted average shares outstanding............... 14,897 14,138 14,094 13,925
Earnings (loss) per share................................. $ 0.11 $ 0.08 $ (0.20) $ (0.06)

The accompanying notes are an integral part of these condensed consolidated
financial statements.

AMERICAN CLASSIC VOYAGES CO.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and par value)

(Unaudited) (Audited)
June 30, December 31,
1998 1997
----------- ------------

ASSETS
Cash and cash equivalents........................ $ 20,972 $ 19,187
Restricted short-term investments................ 60 325
Accounts receivable.............................. 1,436 1,299
Prepaid expenses and other current assets........ 8,650 7,813
-------- --------
Total current assets......................... 31,118 28,624

Property and equipment, net...................... 165,973 171,105
Deferred income taxes, net....................... 11,321 9,564
Other assets..................................... 2,744 1,602
-------- --------
Total assets................................. $211,156 $210,895
======== ========

LIABILITIES
Accounts payable................................. $ 11,205 $ 14,282
Other accrued liabilities........................ 15,277 18,093
Current portion of long-term debt................ 4,100 4,100
Unearned passenger revenues...................... 43,311 33,713
-------- --------
Total current liabilities.................... 73,893 70,188

Long-term debt, less current portion............. 79,438 81,488
-------- --------
Total liabilities............................ 153,331 151,676
======== ========
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value (5,000,000 shares
authorized, none issued and outstanding)....... -- --
Common stock, $.01 par value (20,000,000 shares
authorized; 14,148,055 and 14,006,015 shares
issued, respectively) ......................... 141 140
Additional paid-in capital....................... 78,750 77,059
Accumulated deficit.............................. (20,768) (17,980)
Common stock in Treasury, at cost (20,000 shares) (298) --
-------- --------
Total stockholders' equity....................... 57,825 59,219
-------- --------
$211,156 $210,895
======== ========

The accompanying notes are an integral part of these condensed consolidated
financial statements.

AMERICAN CLASSIC VOYAGES CO.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

For the Six Months
Ended June 30,
----------------------
1998 1997
---------- ---------

OPERATING ACTIVITIES:
Net loss........................................ $ (2,788) $ (811)
Depreciation expense........................ 8,489 7,136
Gain on sale of assets...................... (300) --
Changes in working capital and other:
Working capital changes and other......... (7,834) (3,792)
Unearned passenger revenues............... 9,598 9,068
-------- --------
Net cash provided by operating activities... 7,165 11,601
-------- --------

INVESTING ACTIVITIES:
Decrease in restricted short-term investments... 265 2,375
Capital expenditures............................ (4,801) (12,980)
Proceeds from sale of assets.................... 300 --
-------- --------
Net cash used in investing activities....... (4,236) (10,605)
-------- --------

FINANCING ACTIVITIES:
Repayment of borrowings......................... (2,050) (2,050)
Purchase of common stock........................ (298) --
Issuance of common stock........................ 1,204 460
-------- --------
Net cash used in financing activities....... (1,144) (1,590)
-------- --------

Increase (decrease) in cash and cash equivalents.. 1,785 (594)
Cash and cash equivalents, beginning of period.... 19,187 17,908
-------- --------
Cash and cash equivalents, end of period.......... $ 20,972 $ 17,314
======== ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest.................................... $ 3,041 $ 3,129
Income taxes................................ -- 194

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Drydock expenditures:
Capital expenditures........................ $ -- $ (3,490)
Increase in accounts payable................ -- 3,490
======== ========

The accompanying notes are an integral part of these condensed consolidated
financial statements.

AMERICAN CLASSIC VOYAGES CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)

1. BASIS OF PRESENTATION:

These accompanying unaudited Condensed Consolidated Financial Statements
("Financial Statements") have been prepared pursuant to Securities and Exchange
Commission ("SEC") rules and regulations and should be read in conjunction with
the Consolidated Financial Statements and Notes thereto included on Form 10-K
for the year ended December 31, 1997 (the "Form 10-K") for American Classic
Voyages Co. ("AMCV") and its subsidiaries. These Financial Statements include
the accounts of AMCV and its wholly owned subsidiaries, The Delta Queen
Steamboat Co. ("DQSC") and Great Hawaiian Cruise Line, Inc. ("GHCL")
(collectively with such subsidiaries, the "Company"). The following notes to the
Financial Statements highlight significant changes to the notes included in the
Form 10-K and such interim disclosures as required by the SEC. These Financial
Statements reflect, in the opinion of management, all adjustments necessary for
a fair presentation of the interim financial statements. All such adjustments
are of a normal and recurring nature. Certain previously reported amounts have
been reclassified to conform to the 1998 presentation.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

2. RECENT PRONOUNCEMENTS:

In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Standards ("SFAS") No. 129, "Disclosure of Information
about Capital Structure." This statement is effective for financial statements
for periods ending after December 15, 1997. See activities presented below:

Common Stock: Shares of Stock

At December 31, 1997..................................................... 14,006,015
Issued under employee benefit plans including exercises of stock options.. 135,040
Issued upon conversion of stock units..................................... 7,000
----------
At June 30, 1998.......................................................... 14,148,055
==========

Treasury Stock:

At December 31, 1997..................................................... --
Purchased................................................................. 20,000
----------
At June 30, 1998.......................................................... 20,000
==========

In June 1997, the FASB issued SFAS No. 131 "Disclosure about Segments of an
Enterprise and Related Information," which requires the reporting of certain
information about operating segments and related disclosures about products and
services, geographic areas, and major customers. The Company is required to
adopt the new standard in 1998; however, this statement need not be applied to
interim financial statements during the initial year.

3. EARNINGS PER SHARE:

In February 1997, FASB issued SFAS No. 128, "Earnings Per Share", which requires
dual presentation of basic and diluted earnings per share. The Company has
adopted the new standard and earnings per share information for prior years has
been restated accordingly. See reconciliations presented (in thousands, except
per share data) below:

For the Three Months
Ended June 30,
----------------------
1998 1997
-------- -------

Basic:
Net income.......................................................... $ 1,574 $ 1,177
Weighted average shares............................................. 14,120 13,940
------- -------
Basic per share amount.............................................. $ 0.11 $ 0.08
======= =======

Diluted:
Net income.......................................................... $ 1,574 $ 1,177

Weighted average shares............................................. 14,120 13,940
Additional shares assuming exercise of dilutive stock options and
immediate vesting of stock units................................... 777 198
------- -------
Diluted weighted average shares..................................... 14,897 14,138
------- -------
Diluted per share amount............................................ $ 0.11 $ 0.08
======= =======

As the Company reported losses for the six months ended June 30, 1998 and 1997,
diluted earnings per share was computed in the same manner as basic earnings per
share.

4. DEBT:

Long-term debt consisted of (in thousands):

June 30, December 31,
1998 1997
-------- ------------

U.S. Government Guaranteed Ship Financing Note, American Queen
Series, LIBOR + 0.25% floating rate notes due semi-annually
beginning February 24, 1996 through August 24, 2005............. $ 18,021 $ 19,233
U.S. Government Guaranteed Ship Financing Bond, American Queen
Series, 7.68% fixed rate, sinking fund bonds due semi-annually
beginning February 24, 2006 through June 2, 2020................ 36,198 36,198
U.S. Government Guaranteed Ship Financing Note, Independence
Series A, LIBOR + 0.27% floating rate notes due semi-annually
beginning June 7, 1996 through December 7, 2005................. 9,909 10,570
U.S. Government Guaranteed Ship Financing Bond, Independence
Series A, 6.84% fixed rate sinking fund bonds due semi-annually
beginning June 7, 2006 through December 7, 2015................. 13,215 13,215
U.S. Government Guaranteed Ship Financing Note, Independence
Series B, LIBOR + 0.27% floating rate notes due semi-annually
beginning December 7, 1996 through December 7, 2005............. 2,655 2,832
U.S. Government Guaranteed Ship Financing Bond, Independence
Series B, 7.46% fixed rate sinking fund bonds due semi-annually
beginning June 7, 2006 through December 7, 2015................. 3,540 3,540

Revolving credit facility (maximum availability of $15 million)... -- --
-------- --------
83,538 85,588
Less current portion.............................................. 4,100 4,100
-------- --------
$ 79,438 $ 81,488
======== ========

As of June 30, 1998, the Company complied with all covenants under its various
debt agreements.

5. ACCUMULATED DEFICIT:

Changes in accumulated deficit for the six months ended June 30, 1998 were (in
thousands):

Accumulated deficit at December 31, 1997........... $(17,980)
Net loss........................................... (2,788)
--------
Accumulated deficit at June 30, 1998............... $(20,768)
========

AMERICAN CLASSIC VOYAGES CO.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

GENERAL

American Classic Voyages Co. ("AMCV," or along with its subsidiaries, the
"Company"), is a holding company which owns and controls The Delta Queen
Steamboat Co. ("DQSC") and Great Hawaiian Cruise Line, Inc. ("GHCL"). The
Company, through its various subsidiaries, operates two cruise lines: "Delta
Queen", which owns and operates the American Queen, Mississippi Queen and Delta
Queen steamboats, and "American Hawaii", which owns and operates the
Independence steamship.

The following discusses the Company's consolidated results of operations and
financial condition for the second quarter and six month period ended June 30,
1998 versus the comparable periods ended June 30, 1997. This section should be
read in conjunction with the Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the Company's Form 10-K for the
year ended December 31, 1997.

Delta Queen's operations are seasonal. Historically, there is greater passenger
interest and higher yields in the spring and fall months of the year and the
vessels typically undergo an annual lay-up in December and/or January. American
Hawaii historically experiences greater passenger interest in the summer and
fall months of the year. During the summer months, in particular, American
Hawaii tends to have average occupancy in excess of 100% as the number of
families sharing cabins with children increases significantly during this
period.

American Hawaii is required by the U.S. Coast Guard to drydock the Independence
once every 30 months, and as such, the Independence was out of service for a
four-week period ending June 13, 1997 ("Independence drydock"). As a result of
the factors mentioned above, interim results of operations are not necessarily
indicative of results for a full year.

RESULTS OF OPERATIONS

The following tables set forth various financial results and operating
statistics for the three months and six months ended June 30, 1998 and 1997 (in
thousands):

FINANCIAL HIGHLIGHTS

For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------- ------------------
1998 1997 1998 1997
------- ------- ------- -------

Revenues.................... $53,535 $42,356 $94,203 $82,728
======= ======= ======= =======

Operating income (loss)..... $ 4,037 $ 3,451 $(2,106) $ 1,582
======= ======= ======= =======

Net income (loss)........... $ 1,574 $ 1,177 $(2,788) $ (811)
======= ======= ======= =======

OPERATING STATISTICS

For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------- -------------------
1998 1997 1998 1997
-------- -------- -------- --------

Fare revenue per passenger night............ $ 231 $ 245 $ 222 $ 233
Total revenue per passenger night........... $ 322 $ 313 $ 315 $ 308

Weighted average operating days (1):
DELTA QUEEN.............................. 91 91 164 162
AMERICAN HAWAII.......................... 91 63 181 153

Vessels capacity per day (berths) (2):
DELTA QUEEN.............................. 1,026 1,026 1,026 1,026
AMERICAN HAWAII.......................... 867 817 867 817

Passenger nights (3)........................ 166,497 135,486 298,822 268,375
Physical occupancy percentage (berths) (4).. 97% 94% 92% 92%

___________________

(1) Weighted average operating days for each cruise line is determined by
dividing capacity passenger nights for each cruise line by the cruise
line's total vessel capacity per day. Capacity passenger nights is
determined by multiplying, for the respective period, the actual operating
days of each vessel by each vessel's capacity per day.

(2) Vessel capacity per day represents the number of passengers each cruise
line can carry assuming double occupancy for cabins which accommodate two
or more passengers. Some cabins on the Independence and the American Queen
can accommodate three or four passengers.

(3) A passenger night represents one passenger spending one night on a vessel;
for example, one passenger taking a three-night cruise would generate three
passenger nights.

(4) Physical occupancy percentage is passenger nights divided by capacity
passenger nights.

QUARTER ENDED JUNE 30, 1998 COMPARED TO QUARTER ENDED JUNE 30, 1997

Consolidated second quarter 1998 revenues increased $11.1 million to $53.5
million from $42.4 million for the second quarter 1997 representing a $5.3
million increase in fare revenues combined with a $5.8 million increase in other
revenues. Delta Queen's fare revenues increased $0.8 million, reflecting slight
increases in both fare revenue per passenger night ("fare per diems") and
occupancy rates. American Hawaii's fare revenues increased $4.5 million on a 59%
increase in passenger nights primarily associated with additional operating days
in 1998 as compared to the same period in 1997 when the Independence was out of
service for a four-week drydock. American Hawaii's fare per diems decreased 9.0%
in 1998 as a result of price competition from land-based Hawaiian vacation
alternatives, increased Hawaiian port calls from other cruise lines and a
strategic decision by the Company to attract a greater mix of group business
earlier in the booking cycle at lower yields. The $5.8 million increase in
other revenues was mainly due to the increase in passenger nights at American
Hawaii and an increase in passengers electing to purchase air travel through
American Hawaii under various air promotions. As a result, consolidated total
revenues per passenger night increased to $322; however, the increase in air
revenue was offset by a corresponding increase in related air expenses.

Consolidated cost of operations increased $8.3 million to $33.0 million for the
second quarter of 1998 from $24.7 million for the comparable period of 1997.
American Hawaii's operating costs increased $7.4 million as a result of
increased operating days and an increase in air package expenses corresponding
to the related air revenue increase, as noted above. Delta Queen's operating
costs increased $0.9 million primarily corresponding to the increase in
passenger nights. Consolidated gross profit increased $2.9 million for the
second quarter 1998 as compared to 1997.

Consolidated selling, general and administrative ("SG&A") expenses increased
$1.6 million to $12.3 million for the second quarter of 1998 from $10.7 million
for the same period in 1997. Included in consolidated SG&A expenses were $0.7
million of expenses related to capacity expansion at American Hawaii and at
Delta Queen. The remaining increase was primarily due to an increase in
marketing expenses for both cruise lines. The $0.7 million increase in
depreciation expense was attributable to expenditures capitalized during the
second quarter 1997 Independence drydock and Delta Queen vessel layups completed
earlier in 1998.

The consolidated operating income for the second quarter of 1998 was $4.0
million as compared to $3.5 million for the comparable period of 1997.

Interest expense decreased slightly due to a lower outstanding debt balance in
the second quarter of 1998. The Company's consolidated effective tax rate was
40% for both periods in 1998 and 1997.

SIX MONTHS ENDED JUNE 30, 1998 VERSUS SIX MONTHS ENDED JUNE 30, 1997

Consolidated first half 1998 revenues increased $11.5 million to $94.2 million
from $82.7 million for the first half of 1997 representing a $3.8 million
increase in fare revenues combined with a $7.7 million increase in other
revenues, mainly from the sale of air packages. Delta Queen's fare revenues
decreased $0.4 million, reflecting a slight increase in fare per diems offset by
a 3% decrease in occupancy rates. American Hawaii's fare revenues increased
$4.2 million on a 29% increase in passenger nights associated with the
additional operating days in 1998 as compared to the same period in 1997 when
the Independence was out of service for a four-week drydock. American Hawaii's
fare per diems decreased 9.0% as a result of price competition from land-based
Hawaiian vacation alternatives, increased Hawaiian port calls from other cruise
lines and a strategic decision by the Company to attract a greater mix of group
business earlier in the booking cycle at lower yields. The $7.7 million increase
in other revenues was mainly due to the increase in passenger nights at American
Hawaii and an increase in passengers electing to purchase air travel through
American Hawaii under various air promotions. As a result, consolidated total
revenues per passenger night increased to $315; however, the increase in air
revenue was offset by a corresponding increase in related air expenses.

Consolidated cost of operations increased $10.6 million to $62.4 million for the
first half of 1998 from $51.8 million for the comparable period of 1997.
American Hawaii's operating costs increased $10.8 million primarily as a result
of increased operating days and an increase in air package expenses
corresponding to the related air revenue increase, as noted above. Delta
Queen's operating costs decreased slightly by $0.2 million. Consolidated gross
profit increased $0.9 million for the first half of 1998.

Consolidated SG&A expenses increased $3.2 million to $25.4 million for the first
half of 1998 from $22.2 million for the same period in 1997. Included in
consolidated SG&A expenses were $1.1 million of expenses related to capacity
expansion at American Hawaii and at Delta Queen. The remaining increase was
primarily due to an increase in marketing expenses for both cruise lines. The
$1.4 million increase in depreciation expense was primarily attributable to
expenditures capitalized during the second quarter 1997 Independence drydock and
Delta Queen vessel layups completed earlier in 1998.

The consolidated operating loss for the first half of 1998 was $2.1 million as
compared to a operating income of $1.6 million for the first half of 1997.

Interest expense decreased slightly due to a lower outstanding debt balance in
the first half of 1998. The Company's consolidated effective tax rate was 40%
for both periods in 1998 and 1997.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

Operating Activities

For the six months ended June 30, 1998, cash used in operations before changes
in unearned passenger revenues ("Operating Cash Flow") was $2.4 million compared
to cash provided by operations of $2.5 million in the prior year. The change in
Operating Cash Flow reflected the increase in expenses as mentioned above and
changes in other working capital accounts. Unearned passenger revenues,
representing passenger cruise deposits, increased $9.6 million in the first half
of 1998 from December 31, 1997 reflecting the seasonal increase in advance
reservation levels typically experienced at both cruise lines.

Capital Expenditures

Capital expenditures of $4.8 million in the first half of 1998 included $3.8
million related to the Delta Queen and American Queen lay-ups, which were
completed in the first quarter of 1998. Other significant capital expenditures
included $0.6 million related to design fees and costs associated with capacity
expansion in Hawaii, as discussed below. For the remainder of the year, the
Company anticipates spending approximately $5.0 million, including capitalized
expenditures, on capacity expansion costs mainly related to the vessel design
phase for both American Hawaii and Delta Queen.

Debt

As of June 30, 1998, the Company complied with all covenants under its various
debt agreements.

The Company believes it will have adequate access to capital resources, both
internally and externally, to meet its short-term and long-term capital
commitments. Such resources may include cash on hand and the ability to secure
additional financing through the capital markets. The Company continually
evaluates opportunities to increase capacity at both Delta Queen and American
Hawaii and to strategically grow its business. As discussed below, the Company
announced plans to expand capacity at Delta Queen and American Hawaii. As it
proceeds with such plans, the Company intends to seek additional financing,
although it has not yet determined the nature or amount of such financing.
Although the Company believes that it will be able to obtain sufficient funding
from the capital markets to construct the new vessels, there can be no
assurances that the Company will be able to obtain additional financing at
commercially acceptable levels to finance such new construction and, if the
Company so chooses, to pursue a strategic business opportunity.

Other

In April 1998, the Company announced plans to expand capacity at Delta Queen.
For the Delta Queen fleet, the Company intends to build up to five new small
coastal ships over the next seven to 10 years. The ships, which will each
accommodate 200 to 225 passengers, will cruise in coastal areas and other
itineraries not currently served by existing Delta Queen vessels such as the
East Coast and the Pacific Northwest of the United States. The Company has
completed naval contract designs and is presently pursuing bids from
approximately 15 U.S. shipyards. In addition, the Company is in the process of
obtaining market research to assist in the final determination of the
feasibility of these new vessels. If the Company decides to go forward with the
expansion plan and enter into a shipyard contract, construction of the first new
vessel will begin in early 1999 with its completion in the second half of 2000.

As more fully discussed in the Company's Form 10-K, in October 1997, the Company
announced plans to expand capacity at American Hawaii. The Company intends to
construct two new cruise ships over the next seven years and plans to introduce
an existing foreign-flag cruise ship in the Hawaii market while awaiting
construction of the new vessels. The Company is in the process of selecting a
shipyard and developing cost estimates for the construction of the new cruise
ships and anticipates entering into a shipyard contract by the first quarter of
1999.

The Federal Maritime Commission ("FMC") regulates passenger vessels with 50 or
more berths departing from U.S. ports and requires that operators post security
to be used in the event the operator fails to provide cruise services, or
otherwise satisfy certain financial standards. The Company has been approved as
a self-insurer by the FMC, and therefore, subject to continued approval, is not
required to post security for passenger cruise deposits. The FMC has reviewed
its standards and in June 1996 issued proposed regulations to increase the
financial responsibility requirements. The Company filed its objection to the
proposals, as it believes that the FMC's current standards provide passengers
with adequate protection in the event of an operator's non-performance and that
further requirements may impose an undue burden on operators. If implemented,
these proposed regulations would be phased in over time and, among other things,
would require operators qualifying as a self-insurer, such as the Company, to
satisfy a working capital test, in addition to the existing net worth test, and
to provide third-party coverage for 25% of its unearned passenger revenue in the
form of a surety bond or similar instrument. At this time, the Company cannot
predict if the proposed changes will be approved as currently constituted, or at
all. If they are implemented, the proposed changes would require that the
Company establish a bond to cover a portion of its passenger deposits and
payments, which may impact the Company's liquidity.

In June 1997, the Board of Directors of the Company approved a stock repurchase
plan. The plan authorizes the Company to repurchase up to one million shares of
its stock. These shares may be purchased from time to time in the public market
or through privately negotiated transactions. As of August 3, 1998, the Company
had repurchased 51,000 shares at an average purchase price of $14.84 per share
under the plan.

Factors Concerning Forward-Looking Statements

Certain statements in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions which may impact passenger yields and occupancy; weather patterns
affecting either the inland waterways in the Continental U.S. or the Hawaiian
Islands; unscheduled repairs and drydocking of the Company's vessels;
development, planning and construction costs; construction delays and/or cost
overruns during regularly scheduled lay-ups and/or drydocks; delays and/or costs
overruns during the development and/or construction of new vessels; the impact
of changes and/or repeal of laws and implementation of government regulations;
an increase in capacity at American Hawaii and/or Delta Queen; pursuit of a
strategic business opportunity; and the ability to obtain additional financing,
if necessary.

AMERICAN CLASSIC VOYAGES CO.

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

There are no other material legal proceedings, to which the Company is
a party or of which any of its property is the subject, other than
ordinary routine litigation and claims incidental to the business. The
Company believes it maintains adequate insurance coverage and reserves
for such claims.

ITEM 4. Submission of Matters to a Vote of Security Holders

At the Annual Meeting of Stockholders of American Classic Voyages Co.,
held on June 3, 1998, the stockholders voted on the election of
Directors. The number of shares issued, outstanding and eligible to
vote at the meeting as of the record date of April 3, 1998 were
14,063,451. Proxies representing 12,795,822 shares, or 90.98% of the
shares eligible to vote were received.

Proposal 1 - Election of Directors

Number of Shares/Votes
--------------------------
Name For Authority Withheld
---- --- ------------------

Phillip C. Calian 12,776,688 19,134
Arthur A. Greenberg 12,776,588 19,234
Jerry R. Jacob 12,776,588 19,234
Emanuel L. Rouvelas 12,776,656 19,166
Mark Slezak 12,776,756 19,066
Joseph P. Sullivan 12,772,756 23,066
Jeffrey N. Watanabe 12,776,756 19,066
Samuel Zell 12,776,688 19,134

ITEM 5. Other Information

If a stockholder proposal is introduced at the 1999 Annual Meeting
without any discussion of the proposal in the proxy statement, and if
the proponent does not notify the Company on or before March 15, 1999,
as required by Rule 14a-4(c)(1) under the Securities Exchange Act of
1934, of the intent to raise such proposal at the Annual Meeting, then
proxies received by the Company for the 1999 Annual Meeting will be
voted by the persons named as proxies in their discretion in regard to
such proposal. Notice is to be given to the Company in writing at its
principal office, Two North Riverside Plaza, Suite 200, Chicago,
Illinois 60606, directed to the attention of the Secretary.

ITEM 6. Exhibits and Reports on Form 8-K

a) Exhibits:

10.(iii)(A)(8) American Classic Voyages Co. Amended and Restated
1995 Employee Stock Purchase Plan - Effective July
1, 1998.

27. Financial data schedule.

b) Reports on Form 8-K:

None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

AMERICAN CLASSIC VOYAGES CO.

By: /s/ Philip C. Calian
------------------------------------------
Philip C. Calian
Chief Executive Officer

By: /s/ O. Ivy Wu
------------------------------------------
O. Ivy Wu
Treasurer

Dated: August 13, 1998
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