Carnival Warns on Earnings; Cancels 12 More Cruises
As the crippled ship neared port, Carnival warned that the Triumph mishap will reduce its earnings and canceled a dozen more cruises aboard the ship.
The Miami-based company said the total impact from voyage disruptions and related repair costs will result in an 8 cents to 10 cents per-share reduction to its earnings in the first half of the 2013 fiscal year.
Carnival Cruise Lines said it has canceled a dozen more planned voyages aboard the Triumph and acknowledged that the crippled ship had been plagued by other mechanical problems in the weeks before an engine-room fire left it powerless in the Gulf of Mexico.
The Carnival Triumph left Galveston, Texas, for a four-day cruise last Thursday with 3,143 passengers and 1,086 crew members. It was stranded Sunday after an engine room fire knocked out its primary power source, crippling its water and plumbing systems and leaving it adrift on only backup power. The ship is still at least a day from being guided to port in Alabama.
Carnival has canceled the Triumph's next two voyages. The company is trying to make customers as comfortable as possible, despite reports from some passengers who have told relatives of filthy, hot conditions and limited access to food. Passengers will get a full refund.
The National Transportation Safety Board has opened an investigation into the fire.
Carnival shares ended lower again Thursday after falling 4 percent on Wednesday. What's the stock doing now? Click here for the latest quote.
The company's announcement came as the Triumph was being towed to a port in Mobile, Ala., with more than 4,000 people on board, some of whom have complained to relatives that conditions on the ship are dismal and that they have limited access to food and bathrooms.
The crippled Carnival cruise suffered another setback Thursday when a tow line snapped, setting the ship adrift once again as crews worked to repair it.
Carnival said the estimated time of arrival is between 9pm and 11pm Central Time (10pm and midnight ET).
Passengers were expected to make it to shore Thursday night — only to then face an hours-long bus ride or other travel hassles to finally get back home. Frustrations with the cruise line were simmering on and off the ship, as passengers and their relatives questioned why it has taken so long to get back to dry land after an engine-room fire disabled the ship Sunday.
"There's poop and urine all along the floor," Renee Shanar, of Houston, said from her cellphone aboard the ship. "The floor is flooded with sewer water ... and we had to poop in bags."
The ship was in sight of the Alabama shore Thursday afternoon when the tow line broke. Until the repair is complete, the ship is "dead in the water and when they reconnect safely, they then proceed on their way," Coast Guard Petty Officer William Colclough said.
The 14-story ship still has to negotiate a tricky shipping channel before it could dock. Before the line broke, the ship was traveling about 5 mph.
People in boats, presumably officials from Carnival, the Coast Guard and Customs, have boarded the ship.
Shanar, who is on the ship with her husband, said the couple had a cabin with no windows, so they have been sleeping outside for days. She said the food has been distributed on the 9th floor, and some of the elderly have needed younger people to bring it to them. They were initially only given cold cuts, like turkey and vegetable sandwiches. Then another cruise line dropped off hamburgers and chicken sandwiches, but the line for that fare was nearly four hours long.
"And then people started getting sick from the food," she said.
The company has disputed the accounts of passengers who describe the ship as filthy, saying employees are doing everything to ensure people are comfortable.
Terry Thornton, senior vice president for Carnival Cruiselines, said they received an extra generator that allowed them to serve hot food on the ship Wednesday night, and that the food services will be fully operational when they are docked.
That isn't expected until at least 8 p.m., perhaps later and the massive ship still needs to travel through tricky turns and cross currents — all without the help of its engines.
"This is going to be a long day," Thornton said. "There is no way we can speed up the process."
When passengers arrive in Alabama, their stay will be short. Carnival said in a statement late Wednesday that passengers were being given the option of boarding buses directly to Galveston, Texas, or Houston — a roughly seven-hour drive — or taking a two-hour bus ride to New Orleans, where the company said it booked 1,500 hotel rooms. Those staying in New Orleans will be flown Friday to Houston. Carnival said it will cover all the transportation costs.
Passengers are supposed to get a full refund and discounts on future cruises, and Carnival announced Wednesday they would each get an additional $500 in compensation.
Once docked, the ship will be idle through April.