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Worst-case scenario: the Costa Concordia disaster


5 March 2012


With the Costa Concordia’s recovery operation underway, how will operators restore the industry’s battered reputation?


On the night of 13 January 2012, Costa Concordia partially sank after hitting a reef off the coast of Tuscany, Italy. It ran aground at Isola del Giglio, requiring the evacuation of the 4,252 people onboard. At the time of writing, 32 people are either confirmed or presumed dead.

With a captain threatened with 2,697 years behind bars, more than 2,000t of oil and diesel still being removed from the grounded vessel, and a recovery process that its operator acknowledges could take up to ten months, this story is still some way from a denouement.

Ramifications of the incident

Parent company Carnival Corporation suffered a 21% drop in its share price in the direct aftermath of the disaster and serious questions are being asked regarding what these tragic events might mean for the entire cruise industry.

Operators are reporting a small but significant drop in new bookings and it is Europe, the cruise sector's unrivalled success story of the past few years, where the market has been hit particularly hard.

So, what next?

Despite having occurred less than a fortnight into 2012, there is little doubt that the Concordia disaster will define the year ahead. Under the auspices of the Cruise Lines International Association, operators have moved with unprecedented speed to introduce new legislation requiring muster for embarking passengers prior to departure from port. Expect this to be only the first in a series of initiatives and mandates, as the industry stresses the general safety of a cruise vacation and seeks to restore a damaged standing.

Over the past four years, cruise sector performance has exceeded expectations in what has been an extremely difficult economic environment. It now faces a different but equally acute challenge.

How the industry reacts in the short and medium term, allaying fears and rebuilding the cruising brand, will go some way towards defining performance in the years ahead.

Voices of the Concordia

"All of a sudden the boat listed between 60° and 70°. I tripped and ended up in one of the lifeboats. That's why I was in there." - Captain Francesco Schettino defends his early departure

"This tragedy has called into question our company's safety and emergency response procedures and practices." - Micky Arison, CEO, Carnival Corporation

"If] Costa Crociere does not go bust as a company, it could yet go bust as a brand. We have been annihilated in the media. Our brand has been massacred." - Pier Luigi Foschi, chairman and CEO, Costa Crociere