Bloomberg News

Carnival Flies Guests of 2nd Troubled Ship Home

March 14, 2013

Carnival Flies Passengers Home After Ship Generator Malfunction

People stand before the docked Carnival Corp. ship Triumph in Mobile, Alabama. As of yesterday, Carnival's stock had declined 8.5 percent since Feb. 8, the last trading day before the breakdown on the Triumph. Photographer: Dan Anderson/AFP via Getty Images

Carnival Corp. (CCL:US), operator of the Triumph cruise ship crippled by an engine fire last month, will fly guests home from the Caribbean island of St. Maarten, after a loss of elevator and restroom service aboard its Dream vessel.

The breakdown occurred last night during regularly scheduled testing of the ship’s emergency generator, Miami-based Carnival said today in an e-mailed statement.

“We are making arrangements to fly all guests home via private charter flights and scheduled flights from St. Maarten,” Carnival, the world’s largest cruise operator, said in the statement.

The Triumph fire in February left about 3,100 passengers to cope with unsanitary conditions and food shortages. That incident will crimp first-half fiscal 2013 profit by as much as 10 cents a share, the company has said. The shares are down more than 8 percent since Feb. 8, the last trading day before the Triumph disaster. Carnival reports earnings tomorrow.

“Accidents happen, but the fact that all of these incidents have happened so closely makes the impact more exponential,” Jaime Katz, an analyst with Morningstar Investment Services, said in an interview. “Consumers who don’t necessarily know the safety record of the industry may want to allocate their vacation dollars elsewhere.”

The company probably will face a hit of “a few pennies a share” for the latest incident, Katz said.

Financial Impact

Vance Gulliksen, a spokesman, said he couldn’t provide an estimate of the financial impact of the latest incident. The company operates about 1,500 cruises annually, he said.

Passengers will be flown to Orlando, the airport serving Port Canaveral, or to their final destinations, he said. The company also canceled the next scheduled trip for the Carnival Dream, he said.

The Carnival Dream had about 4,300 passengers and 1,300 crew aboard, according to Gulliksen. The ship was on the last leg of a seven-day cruise and was docked in St. Maarten when the malfunction occurred. The vessel was scheduled to leave yesterday and spend two days at sea before docking March 16 in Florida.

The company website lists the ship’s capacity at 3,646, a number based on two people occupying cabins that can accommodate more, according to Gulliksen.

“We can confirm that only one public restroom was taken offline for cleaning based on toilet overflow and there was a total of one request for cleaning of a guest cabin bathroom,” the company said. “Aside from that there have been no reports of issues on board with overflowing toilets or sewage.”

Passenger Refund

Passengers will get a refund equivalent to three days of their voyage and 50 percent off a future cruise, the company said. The ship is based in Port Canaveral, Florida.

Costa Concordia, a Carnival ship, ran aground off the coast of Italy on Jan. 13 of last year, leaving 32 people dead.

Carnival rose less than 1 percent to $35.73 at the close in New York. The stock has fallen 2.8 percent this year, while competitor Royal Caribbean Cruises Ltd. (RCL:US) has gained 1.1 percent. The Standard & Poor’s 500 Index has advanced 9.6 percent.

To contact the reporter on this story: Rob Golum in Los Angeles at rgolum@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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Companies Mentioned

  • CCL
    (Carnival Corp)
    • $36.36 USD
    • 0.11
    • 0.3%
  • RCL
    (Royal Caribbean Cruises Ltd)
    • $56.59 USD
    • 1.20
    • 2.12%
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