Posted by: Jerry Garrett | November 16, 2010

Carnival Splendor Fire Could Affect 30,000 Passengers

Carnival Splendor undergoing repairs at Port of San Diego, Nov. 11 (May Garrett Photo)

The November 8 fire onboard the Carnival Splendor cruise ship could end up affecting more than 30,000 passengers.

Carnival Cruise Lines announced today that it was cancelling nine scheduled itineraries for the fire-damaged ship, and that it would be out of service until January 16, 2011.

The ship has a capacity of nearly 3,400 passengers. A Carnival spokesman had said a day earlier that many of the cruises subsequently affected were sold out. Some 3,299 passengers were onboard the ship when it caught fire Nov. 8 and was left bobbing helplessly at sea 55 miles off the Baja California coast without power; it needed to be towed to San Diego (instead of its home port in Long Beach), where emergency preparations were made to send passengers back to their homes.

The fares of those passengers were refunded, and a 25 percent discount on a future cruise was offered. A similar offer was made to the passengers impacted by the decision to cancel the vessel’s next nine cruises; all were offered full refunds and discounts on future rebookings.

In addition to that, the cruises spanning the Thanksgiving, Christmas and New Year’s holidays were especially popular, and Carnival generally charged somewhat higher fares for each.

Carnival told Wall Street analysts Tuesday that its fourth quarter earnings estimates would be lowered by about $0.07 per share, because of lost Splendor revenue in November and December. Carnival’s stock dropped as much as three percent on the news.

No estimate was immediately given on possible earnings losses due to Splendor’s cancelled cruises in the first quarter of 2011. The 25 percent discounts offered could also have a ripple affect on 2011 earnings.

The company said it would soon announce detailed repair plans for the crippled ship.

The loss of 30,000 or more cruise ship visitors to the Splendor’s ports of call in Cabo San Lucas, Puerto Vallarta and Mazatlan is expected to have a significant negative impact on those cities’ economies as well.

Jerry Garrett

November 16, 2010

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