“We had a double-digit decline in bookings,” Arison said during the call with analysts. “It wasn’t huge and it didn’t last very long.”
Carnival Corp. Vice Chairman and Chief Operating Officer Howard Frank said that in the past 10 years, the number of issues the company has suffered has been in line with the rest of the industry. The recent stretch, he said, has been an aberration.
“Sadly, we’ve just been hit by a run here that has been very unfortunate and hopefully we’ll get some reprieve from this going forward,” Frank said.
During the call, analysts peppered executives with questions about past problems, maintenance spending and the impact of recent events.
Later, Morningstar equity analyst Jaime Katz said in an interview that she thinks Carnival needs to tweak its advertising to get the safety message across.
While Katz said the recent spate of incidents “shouldn’t have happened,” she said Carnival seems to be reacting appropriately by checking all of its ships.
“Their fleet is much older than it was 10-15 years ago,” she said. “They require a little bit more maintenance to keep things up. I would guess that they were not negligent of it, but maybe it’s a little more difficult to stay on top of that and ascertain whether or not everything is at it should be.”
Carnival Cruise Lines CEO Gerry Cahill said earlier this week that the company is investigating its entire fleet to identify and correct problems similar to the Triumph, which lost power because cabling that connected the two engine rooms was damaged by the fire. The company said it expected roughly five cents a share or $40 million in costs related to upgrading existing ships with fixes related to that review, but executives stressed that number is preliminary.
Bob Peltz, a partner at Leesfield & Partners who represents passengers and crew members in lawsuits against cruise lines, said Carnival needs to show that it’s taking the issues seriously — not just talk about it.
“It has to be more than lip service,” said Peltz, chairman of the cruise line committee of the National Maritime Law Association. “I would be a little concerned. Each time there’s a problem, Carnival comes out and says ‘we’re going to great lengths to study it and learn from it.’ ”
But Miami cruise expert Stewart Chiron, CEO of CruiseGuy.com, said Carnival would not sail a ship that wasn’t seaworthy.
“A really bad decision can be devastating, not only for the cruise line, but the industry,” he said.
Chiron also pointed out that none of the recent problems have caused any injury to passengers. In the case of the Carnival Dream, passengers are being flown from St. Maarten on charter or scheduled flights to Orlando or their final destination all weekend.
“We’re just dealing with simple mechanical issues,” Chiron said. “If there was an issue where passenger safety was involved, I’d be much more concerned.”
This report was supplemented with information from The Associated Press. Miami Herald business editor Jane Wooldridge contributed to this report.