Carnival reports loss after Costa Concordia sinking

Carnival has reported a $139m (£83.6m) loss in the first quarter of 2012 compared to a $152m profit in the same period last year which it attributes mainly to the sinking of the Costa Concordia. The cruise ship operator claims the Costa Concordia incident, which killed 25 people with seven still missing, could cut its profits by up to 82% this year. Bookings dropped 80 – 90 % in the immediate aftermath of the sinking. They have recovered slightly since but remained down by 40 – 50% on 2011. Bookings on Carnival’s other brands have also been down on the previous year. The Costa brand was also impacted when another of its ships became stranded in the Indian Ocean for three days after a fire in the engine room. Carnival Corporation & plc chairman and CEO Micky Arison commented: “Our company is resilient and we will continue to work through this challenging period. We have every confidence that we will restore consumer faith in the Costa brand and the excellent reputation Costa’s management team has built for the organisation which has a deep-rooted Italian heritage spanning more than 60 years. “Carnival Corporation & plc expects to carry nearly 10 million guests on its global fleet this year and the long-term fundamentals of our business remain strong as consumers continue to place tremendous importance on quality and value when making vacation decisions. Based on our solid operating cash flow, strong balance sheet and high investment grade credit ratings we are well positioned for the future and remain confident in our long-term outlook.” The Concordia is being written off as a total loss. Carnival will receive $515 million in insurance for the ship, which sank after hitting rocks off the Italian island of Giglio in January with 4,500 passengers onboard. Costa Cruises is a subsidiary of Carnival and runs 14 of the company’s total fleet of 101 ships. Other brands include Carnival, Cunard, Holland America, Princess and Seabourn.