Will New Carnival CEO Arnold Donald Save the Day or Sink the Ship?

Carnival Cruise This morning there's lots of news articles praising new Carnival CEO Arnold Donald and his cruise line.

Businessweek published "Carnival's Accidental CEO Plots New Course for Cruise Line" suggesting that CEO Arnold is the cruise giant's new messiah who's going to kill the weeds in the Carnival armada and turn things around.

The South Florida Business Journal's headline today is "Donald Making Waves at Carnival Cruise Company." And the financial blog Seeking alpha writes today "Is Carnival Sailing Into Calmer Waters?"

But just last week the Motley Fool published a chart (right) showing that Carnival's earning growth has lagged substantially behind competitors Royal Caribbean and NCL ever since the Concordia disaster. Its article was entitled "Not All Is Smooth Sailing for These Cruise Lines."

Investors Business Daily also chimed in last week in an article "Carnival's Image Woes Linger, Good for Cruise Rivals."

Will Donald be successful in turning things around at Carnival? He certainly is trying hard.  Under his management, Carnival invested heavily in new safety systems, terminated retirement benefits of the crew, created new marketing strategies, and reshuffled the management of Carnival and its Princess and HAL brands.

But the single most important factor, which none of the financial guru's are mentioning, is avoiding another Costa Concordia or Carnival Triumph disaster.  With the largest cruise ship fleet in the world, Carnival statistically has the greatest likelihood of something going wrong on the high seas.  There's not much the new CEO can do about that. Except say a little prayer every night before he goes to sleep, for his 100 + cruise ships.  

 

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