Costa Recovery Still Years Away Following Concordia Tragedy
Carnival Corp. said it will take up to three years for its Costa brand to recover its reputation and profitability after its Concordia ship sank off the Italian coast last year.
"There are a lot of great brands that have had setbacks and they've recovered ... but the economic situation in southern Europe isn't helping," Carnival chairman Micky Arison said at a press conference in London on Tuesday.
The wrecked Costa Concordia, which has lain partly submerged in shallow waters off the Tuscan island of Giglio since the accident in January 2012 which killed 32 people, was rolled off the seabed and onto underwater platforms last week.
"Costa is already beginning to recover, studies of acceptance suggest it (the brand) has recovered nicely," Arison said, adding that it would take "two to three years" to get the brand back to where it was.
The accident was followed by another setback involving Costa's Triumph vessel, which stranded passengers for five days and was eventually evacuated, while the company has also struggled with mechanical issues on other ships. Those issues prompted Carnival to offer a full refund plus an additional 10 percent across all its 10 brands to anyone not happy with their cruise experience.
Arison said Costa remained the number one cruise brand in Italy, France, South America, and China and would likely return to profit this year. The company does not publish revenue and profit figures for its individual brands, which include Cunard and Holland America.
Earlier this year Carnival, which has a market value of around $29 billion, reported a 2 percent fall in second-quarter revenue and warned that bookings for the rest of the year are lower than last year. The company expects to see prices strengthen in 2013/14 after prices remained stable last year.
Its British P&O Cruises business on Tuesday said its newest cruise ship, the Britannia, would enter service in the first quarter of 2015, boosting its annual capacity by 24 percent. The new vessel will be able to carry over 3,600 passengers and will be 25,000 tons larger than P&O Cruises next largest ship. It will initially be used from Southampton in southern England to the Mediterranean, northern Europe and across the Atlantic. The ship will cost Carnival around $801 million.