March 19, 2013

Carnival announces fixes for two ships, with plans for more

In the first step toward making fixes to its fleet, Carnival Cruise Lines said it will improve redundancies, backup power capabilities and fire systems aboard two ships.

Two Carnival Cruise Lines ships will stay out of service longer than planned so they can be outfitted with fixes to better prevent the loss of power in case of an emergency at sea.

The Miami-based company canceled 10 more sailings aboard the Carnival Triumph, which is already undergoing repairs after a disabling Feb. 10 fire. It will carry passengers again on June 3. And Carnival Sunshine, which is in the process of a high-profile transformation from its former life as the Destiny, will start voyages on May 5 after two European cruises are cut.

In an announcement short on details, Carnival said Tuesday that the upgrades are “the first implementation phase” of a fleetwide assessment prompted by the Triumph fire. Executives with parent company Carnival Corp. have said they expected fixes to continue to be made through 2014.

According to a Carnival spokesman, the changes to Sunshine and Triumph include “bolstering these ships’ emergency generator power capabilities, strengthening protections surrounding key electrical systems and re-routing electrical cabling to provide greater protection and help ensure power redundancy.” Fire prevention, detection and suppression systems will also be improved.

The move follows the five-day debacle aboard the Carnival Triumph in February that prompted the cruise line — as well as parent company Carnival Corp. and the industry in general — to conduct a massive fleet review. Since that time, three additional Carnival ships have suffered mechanical issues.

“Our team of experts has worked virtually around the clock to determine the best set of solutions and rapidly develop an effective implementation plan for both of these ships,” President and CEO Gerry Cahill said Tuesday in a statement. “Moving forward, we will have the ability to source materials and schedule improvements much more expediently, thus minimizing the scheduling impact on other vessels.”

Cahill said the review will now focus on the rest of the fleet; the company did not say how many more ships would need fixes. When an analyst asked that question during an earnings call last week, Carnival Corp. Vice Chairman and Chief Operating Officer Howard Frank said he’d prefer to answer when he had an exact number.

“There are a number different ways also to make the modifications, and it really depends on how they select the modifications to be made on the ships that will determine the costs associated with it,” he said. “I did mention that the Carnival ship that was affected, the Triumph, there are a number of ships like that in the fleet, and so that will probably be dealt with first. But there may be some other lesser modifications that we may have to make in the rest of the fleet.”

While the Triumph had two engine rooms, cabling to the forward room was damaged, which knocked out power to the entire ship and left it running on only emergency generator power. More than 4,000 people aboard the ship last month suffered through five days in the Gulf of Mexico without air conditioning, working toilets or hot water.

The recent case was familiar to industry observers: In November of 2010, the Carnival Splendor was set adrift off Mexico’s Pacific coast following a fire. After tugs finally brought the ship to land, the cruise line pledged to get to the bottom of the problem and address issues with fire suppression and redundancies in ships across the fleet.

Cahill said some of those lessons learned after Splendor proved valuable in responding to the Triumph fire. Last week, he would not say if the same cabling problem was responsible for disabling power on the Splendor or how many other ships in the fleet might have the same issue. But in 2011, when the Splendor was returning to service, the company told media outlets that the power outage was the result of fire-damaged cabling.

This month, new questions have emerged after three different ships reported technical issues: the Carnival Dream, which had to fly passengers home from St. Maarten after a routine test revealed a failure in a backup generator; the Carnival Elation, which was struck with a steering problem and the Carnival Legend, which had propulsion issues.

The announcement Tuesday did not address mechanical problems. In a statement over the weekend referring to the most recent trio of issues, the company said: “We are committed to learning from any incident that may occur on one of our vessels to apply lessons learned and prevent future occurrences.”

The Miami-based company’s rash of bad news has taken a toll. Carnival Corp. last week lowered earnings estimates for the rest of the year, saying discounting is pushing revenues down and repairs will drive costs up. The preliminary price tag for repairs related to the review this year is $40 million. Costs related to the Triumph — including repairs and loss of revenue — are expected to reach $80 million.

The company’s stock price has dropped more than 12 percent since Feb. 8, the last day of trading before the Triumph fire. Shares closed Tuesday at $33.21, down more than two percent from the previous day.

Miami Herald editor Jane Wooldridge contributed to this report.

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