Skift Take

Carnival's recent loans gave it about six months of breathing room to survive without almost no bookings. It needs to act decisively if it wants to restore public confidence in time to avoid an even larger crisis.

The U.S. House Committee on Transportation and Infrastructure on Friday launched an inquiry into Carnival’s handling of the coronavirus pandemic, marking the first national investigation of travel companies related to the crisis.

The chairman of the Congressional committee wrote a letter to Carnival President and CEO Arnold Donald on Friday (embedded below) requesting internal documents related to the company’s response to the crisis by May 15.

Carnival wasn’t alone in being caught by surprise in the pandemic, but it had more confirmed cases of coronavirus than other cruise lines, with more than 1,500 confirmed cases among its passengers and crews. The company has broad exposure to the industry, with nine cruise lines and a fleet of 109 passenger ships. Nine of the ships reported either passengers or crew with cases of coronavirus.

The congressional committee also requested documents to help “gain a better understanding of how Carnival intends to protect passengers and crew once vessels resume sailing.”

On Friday, The Wall Street Journal published an investigation suggesting that high-level executives at Carnival and some other cruise companies had awareness of the risks of continuing to sail during the pandemic. The report followed on an earlier Bloomberg BusinessWeek investigation making similar claims and raising questions about company decision-making. Bloomberg reported on the Congressional investigation on Friday.

Skift has reported on how nothing could stop the cruise industry until the coronavirus came along. We noted that while scientists are still figuring out how the coronavirus spreads, there are concerns that cruise ships need to take active steps to contain and combat the spread of the virus. We also noted that the cruise industry’s past pattern of continuing to sail when things go wrong may now have led to heightened scrutiny of how it has handled the latest crisis.

Get the Latest on Coronavirus and the Travel Industry on Skift’s Liveblog

Carnival’s Chief Financial Officer David Bernstein calculated the company needs $1 billion a month “to cover customer refunds, debt payments and operational costs,” the Wall Street Journal reported earlier this week. It has received a $6 billion bond issuance, so that may last for six months. Will cruise-goers return in sufficient numbers by then?

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Tags: arnold donald, carnival, carnival corporation, carnival cruise line, celebrity cruises, congress, coronavirus, cruise industry, cruise lines

Photo credit: Princess Cruises, owned by Carnival Corporation, is at the center of the coronavirus fallout. The U.S. House Committee on Transportation and Infrastructure on Friday launched an inquiry into Carnival's handling of the coronavirus pandemic. 383114 / 383114

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