Skift Take
Carnival Corp. didn't make any concessions in its letter to Senator Rockefeller, arguing that the cruise industry already pays plenty of taxes. Don't expect Carnival to reimburse the U.S. government for its costs in the Triumph incident, although the amount of money would be puny for a corporation of Carnival's size.
Carnival Corp. indicated in a couple of letters to Senator Jay Rockefeller that it has no intent to reimburse the U.S. Coast Guard and Navy for assistance in the recent Carnival Triumph accident, the 2010 Carnival Splendor incidents, or any future problem where they require help from the U.S. government to aid a distressed vessel.
The senator from West Virginia penned a letter March 14 to Carnival CEO Micky Arison alleging that the U.S. Coast Guard responded to 90 “serious events” involving Carnival ships over five years, and that the Coast Guard and Navy had shelled out $4.2 million to cover the Carnival Triumph and Carnival Splendor incidents. The senator asked whether Carnival, since it pays “little or nothing in federal taxes,” will reimburse the Coast Guard and Navy.
Without giving a specific “yes” or “no” answer to the question, James Hunn, Carnival’s senior vice president, corporate maritime policy, wrote: “Carnival’s policy is to honor maritime tradition that holds that the duty to render assistance at sea to those in need is a universal obligation of the entire maritime community.”
For example, the Carnival Breeze diverted from its scheduled course on March 25 and helped the Coast Guard respond to two individuals requiring medical help in a small boat off the Florida coast, Hunn wrote.
UPDATE WITH COMMENT FROM SEN. ROCKEFELLER: Senator Rockefeller, the chairman of the U.S. Senate Committee on Commerce, Science and Transportation, wasn’t pleased with Carnival’s responses to his initial letter.
“Carnival’s response to my detailed inquiry is shameful,” Rockefeller tells Skift. “It is indisputable that Carnival passengers deserve better emergency response measures than they experienced on the Triumph. I am considering all options to hold the industry to higher passenger safety standards.”
Options under consideration would likely range from committee hearings to legislation.
Of the 90 incidents that Rockefeller cited in his letter to Arison, Hunn replied that only seven — including those involving the Carnival Splendor, Costa Concordia, Carnival Triumph and four others — amounted to “serious maritime incidents,” as defined by the Code of Federal Regulations.
More on Carnival:
- Senator Rockefeller is taking on the cruise industry one ship at a time
- Secret of Carnival’s unsinkable business model: free coast guard rescues & no taxes
- Cruise passenger bill of rights: Is it dead in the water?
Some have argued that free U.S. Navy and Coast Guard assistance to Carnival amounts to an integral and relatively overlooked part of the cruise company’s business model.
Hunn dodged the issue of how much Carnival pays in federal taxes, but replied that cruise industry ships that call at U.S. ports “pay hundreds of millions of dollars in annual fees and taxes to federal, state and local government agencies in the form of port head taxes, dock fees, wharfage and other fees.”
Carnival Corp. is the largest cruise company in the world.
In his letter, Hunn goes to great lengths to defend Carnival’s safety record, outlining remedial steps Carnival and the cruise industry took in the wake of the Carnival Splendor, Costa Concordia, and Carnival Triumph incidents.
Arison wrote his own, shorter letter to Rockefeller in which the cruise and Miami Heat owner stood his ground.
Arison wrote to Rockefeller that his letter “seems to cover much of the same ground we discussed” at a meeting a year earlier. Arison indicated he thought the Senator had been satisfied with Carnival’s responses at that earlier meeting, although he characterized the meeting in the senator’s offices as involving a “frank discussion.”
“I assure you, as I did during our discussions, that we remain committed to the safety and comfort of our guests and we are proud of our ability to provide millions of people with safe, fun and memorable vacation experiences,” Arison wrote in a letter dated March 29.
Rockefeller’s office didn’t have any immediate response to the Carnival letters [embedded below].
The letter exchange comes as Senator Charles Schumer of New York has called on the cruise industry to adopt a voluntary passenger bill of rights.
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Tags: carnival, regulation, taxes, triumph
Photo credit: Carnival Triumph passengers wait to debark in the port of Mobile, Alabama, February 14. Lyle Ratliff / Reuters