Carnival suspends fuel supplement charge

NEW YORK - Carnival Corp. suspended its fuel supplement for all cruises on the Miami-based company's six North American brands, effective Dec. 17.

The fuel supplement suspension applies to all voyages departing on or after Dec. 17, and the supplement, which is up to $9 per person per day — except for one brand which is up to $15 per person per day — will be refunded in the form of a ship board credit. The six brands include Carnival Cruise Lines, Costa Cruises, Cunard Line, Holland American Line, Princess Cruises and The Yachts of Seabourn.

Carnival previously suspended its fuel supplement for the six brands on cruises booked after Oct. 31 and departing in 2010. At the time, Carnival said it would refund fuel supplements for 2008 and 2009 departures if oil prices were trading consistently at $70 per barrel or less.

In a statement on Thursday, Carnival's director of marketing, Bill Harber, said oil prices have dropped low enough for the company to lift the surcharges. "As the price of oil has dropped to $46 per barrel, it has now reached a level where we are able to suspend the fuel supplement," Harber said.

Carnival noted that it may reinstate the supplements if oil prices rebound.

Rival Royal Caribbean Cruises Ltd. of Miami previously canceled its fuel surcharges for certain cruises booked after Nov. 10. The company said refunds of fuel charges for bookings made before Nov. 10 for sailings in 2009 and beyond will be determined quarterly based on oil prices.

Royal Caribbean also said it could reinstate fuel surcharges if oil prices trend up.

Carnival's latest action comes during a time when 2009 booking volumes have lagged significantly due to the flagging economy and constraints on consumer spending, according to a company statement in October. Carnival declared a 40 cents per share dividend for December, but suspended its quarterly dividend for the following quarter and said it would likely hold that suspension throughout 2009, depending on future evaluations.

Tanking fuel prices have been one bright spot for the company, which hopes the fuel supplement suspension will make its cruise offerings seem like an economic vacation option for beleaguered consumers.

Pessimism about the global economy helped drive light sweet crude down nearly 7 percent, or $3.12, to settle at $43.67 on the New York Mercantile Exchange. The price of crude oil has shed more than two-thirds its value since its record peak of $147.27 in July.

Shares of Carnival fell 11 cents to close at $21.08.

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