March 12, 2013

After Triumph fire, Carnival checking entire fleet

Carnival Cruise Lines is reviewing its entire fleet to address concerns raised after the disabling Triumph fire, the CEO revealed at an industry forum Tuesday.

Just a month after fire crippled the Carnival Triumph with more than 4,000 people aboard, Carnival Cruise Lines announced it is conducting a comprehensive review of its entire fleet to find and fix problems that could leave other “Fun Ships” adrift and powerless.

A simultaneous examination is also under way at other brands owned by Miami-based Carnival Corp., the world’s largest cruise ship company, and across the industry, executives said Tuesday at the 29th annual Cruise Shipping Miami conference.

“This review is very comprehensive,” said Carnival Cruise Lines President and CEO Gerry Cahill during a panel discussion Tuesday morning. “It will take us a little bit of time to complete it. But you can rest assured that it is our highest priority in the entire organization: We will come up with some solutions that we can implement across our fleet.”

This was the second year in a row that the cruise industry found itself playing defense at one of its biggest gatherings, held annually in Miami Beach. Last year’s event was dominated by talk of the fatal January 2012 Costa Concordia shipwreck in Italy, which rocked cruise operators around the world and forced companies to examine their safety practices more closely.

The 2013 conference, which drew an estimated 11,500 people, touched on highlights: the 20.9 million people expected to cruise globally this year, and the $7.1 billion being spent on 25 new ships this year and next. But the morning’s discussions could not escape the shadow of the Triumph. Fire struck the ship on Feb. 10 as it sailed off the Yucatan Peninsula; tugboats did not reach Mobile, Ala. with the Triumph in tow until late Feb. 14. Though no one was hurt, the incident turned into a public relations disaster for Carnival that drew constant coverage and intense media scrutiny over a lack of working restrooms, long lines for cold food and plastic bags doubling as toilets.

“Even though such incidents are rare, we don’t underestimate their impact,” said Christine Duffy, president and CEO of the Cruise Lines International Association, who touched on the incident in her “state of the industry” address. “But I think it’s important to note that the safety systems and protocols that were in place were effective in returning all passengers and crew home safely.”

During a discussion among the leaders of seven different cruise companies, Cahill said the company is focused on the investigation into the incident, figuring out what lessons can be learned and determining what other operational redundancies might be employed.

Carnival Cruise Lines has called in a slew of experts including naval architects and engineers, electrical engineers and fire safety professionals for the assessment, Cahill said. The examination is looking at prevention, detection and suppression of fires; identifying redundancies in engine rooms and figuring out how to keep guests more comfortable using emergency generator power. Teams have been assembled in Mobile, where the ship remains; Miami; Southampton, England, and Trieste, Italy.

“Since the fire occurred, it has been the No. 1 priority for both Carnival Cruise Lines and Carnival Corp.,” Cahill said.

In an interview with The Miami Herald, Cahill said Tuesday afternoon that the review will focus first on the Triumph, which is still scheduled to return to service in mid-April, and then extend to the rest of the ships “as soon as we can possibly get it done,” he said.

“There’s no one in the world who wants to get to the bottom of this more than I do,” he said.

So far, the U.S. Coast Guard, which is one of the investigating agencies, has said a leak in a fuel return line sparked the blaze. Cahill said in an interview that the flexible piping in question is supposed to be replaced every 18 months and checked every six months. The part that leaked had been replaced five months before, he said.

“It’s within normal guidelines,” he said. “It had been checked and maintained.”

The Triumph had redundancies in place, Cahill said: two engine rooms, two switchboards and two propulsion systems. But cabling to the forward engine room was damaged by the fire, knocking out power there and disabling the ship. He would not say if the same cabling problem was responsible for knocking out power after a fire aboard the Carnival Splendor in 2010. Because designs change over generations of ships, Cahill said he could not make a blanket statement about whether other Carnival ships were susceptible to the same issue, but he said the review will look at that question.

“We will do whatever we have to do to deal with that issue,” he told The Miami Herald. “If we find that on other ships, we will go back and deal with it on other ships.”

While famous in the industry for keeping costs low, Carnival has not skimped on safety, Cahill said. After the Carnival Splendor fire, he said, a team tasked with identifying “lessons learned” recommended that the company spend more than $10 million a year in several areas to improve safety and operations — which Cahill said he is doing.

“You never try and save money on safe operation of a ship,” he told The Miami Herald. “It’s been actually just the opposite. No one in my position would ever take the risk trying to cut back on something related to safety or safe operations. We just couldn’t afford to do that.”

During the morning’s panel discussion, Royal Caribbean International President and CEO Adam Goldstein said that while safety and prevention of injury or death has been the top priority for cruise lines, passenger comfort in case of emergencies is now getting a lot of attention.

“It’s something that through the continuous improvement processes will get better and better as we go forward,” he said.

While travel agents and industry watchers have said they anticipate no long-term impact from the ordeal, a public opinion poll conducted less than a week after the Triumph reached land indicated that the perceived quality of Carnival Cruise Lines and its main competitors dropped significantly. Trust was down as well, the poll showed, and Carnival specifically took a hit in the score that measures future purchase intent.

UBS Investment Research leisure analyst Robin Farley, who met with cruise line managers Monday, said in a note to investors that first-time cruisers were likely the only ones impacted by the ordeal.

“While the most surprising aspect of the Triumph incident may have been the level of media coverage of it, we heard without exception from industry operators that the incident has had no real impact on demand from repeat cruisers, including the Carnival brand’s repeat cruisers,” she wrote. “We spoke to management in detail about safety initiatives that the company has undertaken in recent years. We came away feeling strongly that although Carnival may have an image problem, it does not have a management problem or a safety problem or a maintenance problem.”

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