Royal Caribbean Reports $392,800,000 Loss for Last Quarter

The Associated Press reports that cruise giant Royal Caribbean lost $392.8 million in the fourth quarter because of losses associated with its Spanish cruise line, Pullmantur.

The AP states that Royal Caribbean wrote down $413,900,000 due to a substantial drop in bookings and prices in Spain following the Spanish government’s austerity measures. Royal Caribbean also blamed its losses on the Costa Concordia disaster a year ago.

Royal Caribbean had a profit of $36.6 million during the same quarter a year ago. 

In December we reported that Royal Caribbean's top executive Richard Fain bailed on out on a large block of cruise line stock.

In December 2012, Chairman and Chief Executive Officer Richard Fain sold 143,140 shares of RCL stock for $4,964,095.  

Fain followed up by exercising options and selling 188,443 shares for $6,535,203, for a total of around $11,500,000.  

$11,500,000 in cash in your pocket and 6 weeks later your cruise line posts a loss of over $392,000,000. Goes to show you that cruise line executives have fun making millions hand over fist regardless of how the company performs.

Video below is of CEO Fain on one of the Royal Caribbean FlowRiders (via RCCL YouTube).

 

Hard Times For Carnival? Hardly.

The financial cruise news today is all doom and gloom with cruise giant Carnival reporting another major drop in profits which everyone is attributing to the Costa Concordia cruise ship disaster last January. 

Carnival announced today that it made a net profit of $93,000,000 in the three months leading up to November 30th. Now, is 93 million dollars in profits a bad deal?  Well apparently so compared to the $217,000,000 in profits in the same quarter last year.  Carnival's stock dropped 5.4%. 

Carnival honcho Micky Arison lamented that "as a result of the Costa Concordia tragedy in January, Miami Hear Beer Micky Arison Carnival Cruisethe past year has been the most challenging in our company's history."

Sorry, Micky. I don't feel your pain.  

You seemed to be smiling on the front row at your AA basketball arena the other night as the Miami Heat trounced the Minnesota Timberwolves. Yes it was a great game. But $20 to park the car, $14 for a 16 ounce beer, another $14 for a hot dog, and $11 for two tacos seems a bit steep; I'm not going to even mention the ticket prices.   

Didn't you just pay yourself a $90,000,000 bonus a couple of weeks ago?  

$90,000,000 to you.  $93,000,000 to the stockholders.  Seems fair to me.  After all, I'm drinking your $14 beers.

Eleven Months after Costa Concordia, Cruise Lines Still Struggling to Sell Cruises

The major cruise lines have reduced prices for this winter and early 2013 sailings by around 3.5 percent since late September, according to Bloomberg Businessweek.  

Cruise line operators started this year hoping that they could start charging passengers higher prices after offering discounts following the 2007-2009 recession. But then two weeks into the year, disaster struck when the  Costa Concordia capsized and images of panicked cruise passengers dominated the news. 32 people died. The Concordia still lies in the little Italian port of Giglio like a dead whale.

Costa Concordia - Cruise ShipNot surprisingly, cruise bookings slumped even as the cruise lines lowered prices.

Carnival and Royal Caribbean said that they were optimistic about increased demand and higher prices when they reported third-quarter results in the fall. But some analysts consider the price reductions as a sign that the cruise industry is still struggling and will have to wait until the second half of next year to see real improvements. 

Peak cruise season starts next February and that will be key to see whether the cruise lines can get back on the financial track. But before that, the cruise industry has to endure the one-year anniversary of Costa Concordia in mid January. That will be a difficult time for the cruise lines. As the giant beached whale Concordia remains half submerged on her side in Giglio, the cruise line will have to convince you that cruising is a safe vacation for your family. 

 

Image credit: Giglio News Web Cam

Cruise Facts: Cheap Foreign Labor, No U.S. Taxes & Minimal Compensation to Dead & Injured Passengers

Jim Walker - Maritime Lawyer - Miami FloridaOver the past week, CNN has aired a number of special programs about the cruise industry, revealing a number of things that the industry would prefer you not know.

The segment below focuses on the cruise lines' efforts to avoid U.S  taxes,

By registering their cruise ships in foreign countries, cruise lines avoid most U.S. regulations and virtually all U.S. taxes. The CNN program points out that Carnival is registered in Panama; Royal Caribbean in Liberia; and Princess in Bermuda. Why? Primarily to avoid U.S. taxes.

Last year Carnival paid no U.S. taxes.  None.  Over the last seven years Carnival netted profits of over 11 billion dollars and paid a measly amount in taxes of barely over 1%.

The video shows some interesting comments by Senator Rockefeller (D - WVA) who presided over the hearing in the U.S. Senate about the Costa Concordia disaster. He stated that cruise ships are "getting away with alot."  They register overseas to avoid taxes; they hire cheap labor; they don't reimburse some 20 U.S. federal agencies for services rendered to the foreign cruise ships; and they pay the absolute minimum to passengers who are seriously injured or killed due to their negligence and recklessness.

There is a direct correlation between registering cruise lines in places like Africa or Central America and few safety regulations and lackluster regulatory bodies.      

CNN interviewed me for a short segment of the program where I discuss the extraordinary efforts cruise lines go to limit their liability by inserting onerous terms and conditions filled with legal "mumbo jumbo" to avoid paying fair compensation to injuries passengers and the families of the dead.      

The cruise industry may say that its priority is the safety of passengers, but as Senator Rockefeller said: the cruise lines' financial "bottom line" is the cruise lines' true emphasis.  

Watch the CNN video below:

  

Carnival Announces Quarterly Profits of $1,100,000,000 - But Pushes Lawsuit Against Alaska Over $50 Tax

Today Carnival issued a press release which reported profits of $1,100,000,000 for the third quarter ending August 31, 2009. The cruise line collected revenues from passengers of over $4,000,000,000 in the last three months.

This announcement of Carnival's over-a-billion-dollars-in-profits comes two days after the Carnival dominated "Alaska" Cruise Association filed a lawsuit against Alaska over the $50-a-passenger tax.

Four days ago, the environmental group "Friends of the Earth" gave Carnival a "D-" on the cruise line environmental scorecard.

What a week for Carnival!  A failing pollution grade, over $1,000,000,000 in quarterly profits, and a lawsuit initiated in Alaska over a $50 tax.

What is wrong with this picture?