Carnival Cruise LinesFire Aboard a Stranded Cruise Ship

Carnival

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Splendor

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• Carnival Cruise Lines Story• Cruise Line Industry• Trouble at Sea• Carnival Splendor • Fire and Circus Onboard• Media Response• Recommendations

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Carnival Cruise Lines Story

Carnival

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History• Founded in 1972 by Ted Arison• Has become largest cruise line in world• Rated most popular cruise line in 1987• More passengers than any other cruise line • 1,400 voyages per year• 22 ships• 4 million passengers per year

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Popular Cruise Destinations

• Bahamas• Caribbean• Mexican Riviera• Alaska• Hawaii• Europe• Bermuda

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Mazatlan, Mexico

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Carnival Corporation & Plc• Dual headquarters in Miami, FL and London,

England• Parent company for Carnival Cruise Lines,

Princess, Holland America, P & O• Publicly traded as CCL on New York Stock

Exchange and CUK on London Stock Exchange• Only corporation in the world included in both

S&P 500 and the FTSE 100 indices

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Carnival Corporation & Plc• Total passenger capacity of 191,464 and

serves about 8.5 Million guests annually• Carnival Cruise Lines is the flagship brand and

accounts for 19% of Carnival Corporation capacity, serving 4 million guests annually

• Total revenue of 14.5 billion in 2010• EPS of $2.47 as of November 30, 2010

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Cruise Line Industry

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Cruise Line Industry• Growing industry but still small in comparison

to wider global vacation market• Industry competes for discretionary dollars

with other vacation types• For consumers, vacation spending is third

priority after savings and living expenses

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Industry Capacity• Customers have increased 5.7% from 2005 to

2010• In 2010, the global cruise industry marketed

capacity of 423,000 passenger cabins• Carnival Corporation & Plc accounts for 44% of

this capacity

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Growth Dynamics• Industry identifies following growth factors:– Exceptional value proposition– Wide appeal – Low market penetration– Positive guest demographics– High guest satisfaction rates

• These factors demonstrate high industry growth potential

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Trouble at Sea

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Titanic All Over Again…

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Sinking of Oceanos in 1991

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Common Cruise Issues• Tilting due to rough seas or sharp turns– Carnival Ecstasy (Carnival Cruise Lines)

• Norovirus outbreaks– ms Oosterdam (Holland America Line)

• Pirates– Seabourn Spirit (Seabourn)

• Fires– Star Princess (Princess Cruises)

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Cruising Regulations• Cruise ships must develop and practice

contingency plans to meet IMO and the U.S. Coast Guard standards– International Maritime Organization (IMO)

establishes international cruising standards– U.S. Coast Guard examines all new cruise vessels

and thereafter inspects each ship quarterly

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Carnival Splendor

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Ship Details• One of the largest vessels owned by Carnival

Cruise Lines– 113,300 ton, 952 foot long ship, 13 passenger decks– 1,503 guest staterooms can accommodate over 3,000

guests per voyage• Registered in Panama• Six diesel engines, three in the aft engine room

and the other three in the forward engine room

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Carnival Splendor Sets Sail

• Departed Long Beach, California on Sunday, November 7, 2010

• Weeklong cruise of the Mexican Riviera– Stops in Puerto Vallarta, Mazatlan, and Cabo San

Lucas, Mexico. • Scheduled to arrive back in Long Beach with

its 3,299 guests and 1,167 crew on Saturday, November 13

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Fire!

Fire

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Fire!• On Monday, November 8 around

6:00 a.m. a fire started in the aft engine room

• Cruise Director instructed passengers over public address system to proceed to upper decks and called it a “smoke fire”

• 200 miles south of San Diego

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“Smoke Fire” Announcement

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Cruise Director John Heald's Announcement to Passengers

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Fire Results• Blaze extinguished by crew members and fire

suppression system• Fire damaged electrical switchboard• Prevented electrical transmission to

propulsion, communication, and other operations systems

• Power could not be restored but auxiliary generators were used for vital systems

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Response to the Fire• Crew communicated with U.S. Coast Guard– By Monday afternoon, three cutters and a

helicopter were dispatched• Mexican navy also responded with aircraft and

tugboats• Cruise Director, John Heald, delivered frequent

updates to passengers about the situation

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Rescue Aid

• Supplies were flow from North Island Naval Station in Coronado and ferried by helicopter from the USS Ronald Reagan, an aircraft carrier diverted from nearby maneuvers

• The U.S. Navy supplied the ship on Tuesday with 70,000 pounds of bread, canned milk, crab meat, and Spam

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“Circus” Aboard the Splendor

• No electrical power• No refrigerated or hot food • No functioning toilets for about 16 hours

(restored Monday evening)• No air conditioning• No hot water• Smells of rotting food and sewage

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New Guest Accommodations• Casinos closed• Swimming pools closed due to lack of filtration• Passenger cabins pitch black and stuffy• Passengers ate sandwiches, salads, and crab meat• How passengers overcame boredom:– Live music– Scavenger hunts– Trivia contests– Card games– Free alcohol

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Corporate Decisions• "We've been in business for 35 years," said

CEO Gerry Cahill. "We've never had anything like this happen before.“

• Objective: Get passengers safely to port– Initial plan was to tow the Splendor to the

Mexican port of Ensenada– Carnival changed the destination to San Diego

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Media Response

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Contact with Land• The events on Monday and Tuesday occurred

outside of cellular phone service range– Passengers were unable to personally update friends

and family of their safety• Ship entered cell phone range on Wednesday,

November 10, 2010– Passengers made personal cell phone calls and sent

pictures and text messages– News outlets interviewed passengers aboard the ship

via cell phones

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Passenger Interview

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Phone Call with Passenger Aboard the Ship

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Carnival & Social Media• Carnival used Twitter and Facebook primarily

as push mechanisms to provide factual updates about the cruise

• Cruise Director, John Heald, updated his blog from the ship on Wednesday, November 10 – “The guests have been magnificent and have risen

to the obvious challenges and difficult conditions onboard.” (johnhealdsblog.com)

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Passengers & Social Media• Passengers uploaded pictures and videos to

YouTube of their experiences• The volume of social media about the

Splendor created significant buzz on the Internet

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“Spamcation”• Media outlets used “Spam cruise”

and “Spamcation” as taglines • Carnival tweeted, “Despite media

reports to the contrary, Carnival Splendor guests were never served Spam!”

• Opportunistic individual sold commemorative “Spamcation” t-shirts upon ship’s arrival

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