Baltimore bridge disaster will cost Carnival $10m

ByTravelling For Business

March 28, 2024
Baltimore bridge disaster to cost Carnival $10mBaltimore bridge disaster to cost Carnival $10m

The collapse of Baltimore’s Francis Scott Key Bridge on Tuesday will cost Carnival Corporation, the owner of Cunard Line, an estimated $10 million as it temporarily shuts down its terminal at the port.

This announcement has prompted Carnival to move its Carnival Legend’s Baltimore operations to Norfolk, Virginia, while rescue and remediation efforts are underway at the harbour.

The insured losses for the bridge collapse could range from $2 billion to $4 billion, depending on the duration of the blockage and the extent of the business interruption coverage. These figures could surpass the record for the Costa Concordia disaster, which resulted in insurers paying out more than $2 billion and claimed 32 lives, according to Morningstar DBRS, a ratings agency.

Despite the financial impact of the bridge collapse, shares in Carnival Corporation rebounded and were trading 2.9 percent higher at $7.50 in midday trading in New York. This increase followed Carnival’s upward revision of its annual profit forecast, anticipating a record year of bookings.

Cruise companies are experiencing unprecedented booking rates as travelers opt for more affordable seaborne vacations over expensive land-based options involving hotel bookings or flights. This shift has allowed operators to raise prices, contributing to Carnival’s positive outlook.

Josh Weinstein, the CEO of Carnival, expressed satisfaction with the company’s performance, stating, “This has been a fantastic start to the year.” Carnival reported strong first-quarter revenue of $5.41 billion, in line with analysts’ expectations.

Moreover, bookings for the remainder of 2024 are at an all-time high, with total customer deposits reaching a new first-quarter peak of $7 billion. Despite challenges such as the re-routing of ships in the Red Sea region, Carnival remains optimistic about its prospects due to robust demand trends throughout the year.

Adjusted cruise costs, excluding fuel and in constant currency, increased by 7.3 percent in the first quarter compared to the same period last year, reflecting the company’s ongoing investments and operational adjustments.