(6:40 a.m. EDT) -- A Danube cruise on the 170-passenger river ship, Avalon Tranquility, has been abandoned after the vessel was struck by a cargo ship on Friday evening. The collision took place just north of Passau in Germany, the impact causing extensive damage to Avalon Tranquility's hull. According to a statement from the ship's operator, Avalon Waterways, the resulting two-foot hole was away from passenger areas but significant enough to flood the engine room. Nobody was hurt but the 157 passengers, from the USA, Australia and New Zealand, and 43 crewmembers were mustered on deck in their lifejackets. River Empress, which belongs to rival Uniworld, was passing in the opposite direction and helped transfer the guests to nearby Deggendorf, where they were taken by coach to Regensburg to spend the night in two hotels. According to the Web Site Cruise Maven, which reported the story, the Danube had to be closed to shipping traffic in both directions during the rescue and subsequent emergency repairs. Avalon Waterways appears to have been quick to respond to the incident. According to the company's press statement, passengers were given two options: to be flown home; or to continue with a land programme taking in the sites they were supposed to see on the Amsterdam to Budapest cruise. “The vast majority of our travellers chose option two,” a spokeswoman told Cruise Critic. “In addition, all travellers are being compensated with a refund for the majority of their cruise and a voucher for future travel in 2011, 2012 or 2013.” As for the ship…According to the local paper, Vilshofener Anzeiger, divers made emergency repairs to the tear in the hull and the crippled Tranquility was moved on Sunday to Passau. Today, it will be towed to a shipyard in Linz; the engines are not working as there is still more than a foot of water in the engine room. Passengers' luggage has, however, been retrieved. So how did it happen? The statement from Avalon says that the cargo ship was loose from its mooring, which implies that the accident was the fault of the cargo ship's captain. But the Vilshofener Anzeiger report claims that both captains were in radio contact and an enquiry will take place. For Avalon, this is the second disruption to a European river cruise in a matter of weeks. In August, the brand-new, 164-passenger Avalon Panorama ended up in dry dock thanks to a faulty propeller (click here to view that story), with the cruise continuing for a segment of its itinerary by bus. --by Sue Bryant, Cruise Critic Contributing Editor