Carnival Cruise Lines: Wreck of the Costa Concordia

Abstract

On Friday, January 13th, 2012, around 9:40 p.m. local time, the Costa Concordia, a luxury cruise ship carrying 4,200 passengers, punctured its hull off the coast of Italy. What followed the collision was a chaotic evacuation, irresponsible actions from the ship’s captain, and a lack of communication from the parent company, Carnival, all leading to a public relations disaster.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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Resources

Exhibit 1: Costa Concordia Route

Figure

Source: Agar, Michael & Blenkinso, Andrew. “Concordia: How the Disaster Unfolded,” The Telegraph. 16 Jan. 2012. http://www.telegraph.co.uk/news/interactive-graphics/9018076/Concordia-How-the-disaster-unfolded.html

Exhibit 2: Impact

Figure

Source: Agar, Michael & Blenkinso, Andrew. “Concordia: How the Disaster Unfolded,” The Telegraph. 16 Jan. 2012. http://www.telegraph.co.uk/news/interactive-graphics/9018076/Concordia-How-the-disaster-unfolded.html

Exhibit 3: Carnival Acquisitions & Mergers

1989: Premium operator Holland America Line (this purchase included niche operator Winstar Cruises and Alaskan/Canadian tour operator Holland America Tours)

1992: Luxury brand Seabourn Cruise Line

1997: Genoa, Italy-based contemporary brand Costa Cruises, Europe’s number one cruise operator

1998: Premium/luxury operator Cunard line, which built the 150,000-ton Queen Mary 2

2003: Merge with P&O Princess Cruises, adding to their fleet:

  • Premium brand Princess Cruises
  • Esteemed British operator P&O Cruises
  • P&O Cruises Australia
  • Germany’s AIDA Cruises
  • United Kingdom operator Ocean Village, catering to a younger active clientele
  • Premium United Kingdom brand Swan Hellenic

Source: “Mission & History,” Carnival Corporation. http://phx.corporate-ir.net/phoenix.zhtml?c=200767&p=irol-history

Exhibit 4: Cruise Company Market Share by US Departures

Figure

Source: Mintel Market Research Cruise Industry Leaders. Jan. 2012

Exhibit 5: Transcript of the conversation between Captain Francesco Schettino and Captain Gregorio De Falco of the Coast Guard

Captain De Falco repeatedly orders Schettino to return to the ship to oversee the evacuation, while Schettino resists, making excuses that it is dark and that the ship is listing.

De Falco: “This is De Falco speaking from Livorno. Am I speaking with the commander?”

Schettino: “Yes. Good evening, Cmdr. De Falco.”

De Falco: “Please tell me your name.”

Schettino: “I’m Cmdr. Schettino, commander.”

De Falco: “Schettino? Listen Schettino. There are people trapped on board. Now you go with your boat under the prow on the starboard side. There is a pilot ladder. You will climb that ladder and go on board. You go on board and then you will tell me how many people there are. Is that clear? I’m recording this conversation, Cmdr. Schettino…”

Schettino: “Commander, let me tell you one thing…”

De Falco: “Speak up! Put your hand in front of the microphone and speak more loudly, is that clear?”

Schettino: “In this moment, the boat is tipping…”

De Falco: “I understand that, listen, there are people that are coming down the pilot ladder of the prow. You go up that pilot ladder, get on that ship and tell me how many people are still on board. And what they need. Is that clear? You need to tell me if there are children, women or people in need of assistance. And tell me the exact number of each of these categories. Is that clear? Listen Schettino, that you saved yourself from the sea, but I am going to… I’m going to make sure you get in trouble….I am going to make you pay for this. Go on board, (expletive)!”

Schettino: “Commander, please…”

De Falco: “No, please. You now get up and go on board. They are telling me that on board there are still…”

Schettino: “I am here with the rescue boats, I am here, I am not going anywhere, I am here…”

De Falco: “What are you doing, commander?”

Schettino: “I am here to coordinate the rescue…”

De Falco: “What are you coordinating there? Go on board! Coordinate the rescue from aboard the ship. Are you refusing?”

Schettino: “No, I am not refusing.”

De Falco: “Are you refusing to go aboard commander? Can you tell me the reason why you are not going?”

Schettino: “I am not going because the other lifeboat is stopped.”

De Falco: “You go aboard. It is an order. Don’t make any more excuses. You have declared ‘abandon ship.’ Now I am in charge. You go on board! Is that clear? Do you hear me? Go, and call me when you are aboard. My air rescue crew is there.”

Schettino: “Where are your rescuers?”

De Falco: “My air rescue is on the prow. Go. There are already bodies, Schettino.”

Schettino: “How many bodies are there?”

De Falco: “I don’t know. I have heard of one. You are the one who has to tell me how many there are. Christ.”

Schettino: “But do you realise it is dark and here we can’t see anything…”

De Falco: “And so what? You want to go home, Schettino? It is dark and you want to go home? Get on that prow of the boat using the pilot ladder and tell me what can be done, how many people there are and what their needs are. Now!”

Schettino: “…I am with my second in command.”

De Falco: “So both of you go up then… You and your second go on board now. Is that clear?”

Schettino: “Commander, I want to go on board, but it is simply that the other boat here … there are other rescuers. It has stopped and is waiting…”

De Falco: “It has been an hour that you have been telling me the same thing. Now, go on board. Go on board! And then tell me immediately how many people there are there.”

Schettino: “OK, commander”

De Falco: “Go, immediately!”

Source: “Transcript: The Costa Concordia Captain in His Own Words,” The Independent. 17 Jan. 2012. http://www.independent.co.uk/news/world/europe/transcript-the-costa-concordia-captain-in-his-own-words-6290924.html

Exhibit 6: Carnival Corporation’s Press Release of January 18, 2012

Costa Cruises and Carnival Corporation & plc Reiterate Commitment to Support Costa Concordia Passengers and Crew

Genoa, Italy and MIAMI – January 18, 2012 – Costa Cruise Lines and its parent company, Carnival Corporation & plc, today confirmed their commitment to provide full support to those passengers, crew and families of the victims of the Costa Concordia grounding.

“I give my personal assurance that we will take care of each and every one of our guests, crew and their families affected by this tragic event. Our company was founded on this principle and it will remain our focus,” said Micky Arison, chairman and CEO of Carnival Corporation & plc. In this spirit, Costa has been arranging lodging and transportation for affected passengers and crew members to return home. Every passenger and crew member or their family is being contacted and the company has offered its assistance and counseling as needed, and will be addressing personal possessions lost on board. Costa has also begun the process of refunding all voyage costs including both passenger cruise fares and all costs incurred while on board. Our senior management teams are working together to determine additional support.

“During this time of tragedy, we are doing our very best to provide the needed support to the Costa Concordia passengers, crew and their families,” said Pier Luigi Foschi, chairman and CEO of Costa Cruises.

# # #

Media Contacts:

Costa Cruises: Buck Banks/NewmanPR, +1-305-461-3300, buck@newmanpr.com

Carnival Corporation & plc: Jennifer de la Cruz, +1-305-599-2600, ext. 16000

Source: “Press Release,” Carnival Corporation. 18 Jan. 2012. http://phx.corporateir.net/phoenix.zhtml?c=200767&p=irol-newsArticle&ID=1650164&highlight=

Exhibit 7: Carnival Corporation’s Share Price

Figure

Source: Yahoo! Finance. 24 Jan. 2012

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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