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Costa Concordia Grounds and Capsizes
Jan 16, 2012
According to Costa Cruises, the tragic grounding and capsizing of Costa Cruises’ Concordia off the coast of Tuscany, Italy, on the night of Friday, Jan. 13 was caused by the captain’s desire to give passengers a closer view of the nearby island of Giglio.
At an international press conference, Costa Crociere chairman and CEO Pier Luigi Foschi attributed the incident to Capt. Francesco Schettino’s deviation from the authorized route followed by Costa more than 100 times annually without incident. Concordia was cruising from Civitavecchia with scheduled calls at Savona, Italy; Marseille, France; Barcelona and Palma de Mallorca, Spain; and Palermo, Italy, with several embarkation options for passengers.
“The rocks they hit were not submerged and were on charts of any size,” said Foschi. “There are both visual and auditory warnings when a ship leaves the prescribed course, unless someone neutralizes them.”
In reply to inquiries as to whether the captain was drunk at the time, Foschi said that he didn’t drink. Capt. Schettino has been arrested for manslaughter, shipwreck and abandoning ship. Costa and Carnival Corporation executives have expressed heartfelt sorrow for the accident.
Foschi countered criticism of Costa’s lifeboat drill frequency, saying that all guests, except the 696 who had arrived in Civitavecchia, Italy, had done a safety drill, and those who had been onboard less than four hours when the grounding took place. It seems questionable whether such a drill would have made a great deal of difference, given that the extreme list of the ship to one side made rescue operations very difficult. Passengers could only be evacuated from half of the stations; there were reports of guests crawling up a high incline to get out and others jumping. Italy’s Civil Protection Department’s Web site reported that the Concordia was carrying 4,228 people, including crew. One hundred and twenty-nine guests were Americans.
Authorities have seized the Concordia and impounded the black box that contains all the navigational records, and Foschi said Costa will not receive some of the details of the accident until those are made public. He added that Costa’s safety procedures and equipment are state of the art and that the crew behaved “heroically.” Costa believes the ship was just 164 yards from the shore when she struck the rocks and Italy’s Civil Protection Department said passengers who were able to get into lifeboats reached the coast of Giglio and received medical care there.
With a mounting death toll, the passengers still unaccounted for are Costa’s top priority, followed by concerns to avoid an environmental disaster with 24,000 tons of heavy fuel onboard. The search and rescue effort is ongoing and, on Jan. 17, holes were blasted to allow divers to access flooded lower staterooms. A Dutch salvage company is also on hand and waiting for the approval from officials to begin the clean up. So far, there have been no reports of any leakage, and there is some indication that salvage operations will seal the ship.
At the same time, the Italian newspaper Corriere della Sera printed what was identified as the transcript of a call between a port authority officer and Captain Francesco Schettino, picked up and translated by the BBC. In the transcript the captain, who was on a lifeboat along with his second officer during the initial rescue operation, was several times ordered back on the Concordia to effect rescue operations by Gregorio de Falco of the Italian Coast Guard in Livorno. Several sources reported that Schettino ignored the order and took a taxi away on the island of Giglio before he was arrested; the captain appeared in court in a closed session on Tuesday and reportedly has denied any wrongdoing.
Concordia is expected to be out of service for the remainder of our current fiscal year if not longer. Costa is working on opportunities to offer guests booked for future Concordia cruises. They do not yet know whether the ship can be salvaged.
Carnival Corporation, parent company for Costa, has insurance coverage for damage to the vessel with a deductible of approximately $30 million as well as insurance for third-party personal injury liability subject to an additional deductible of approximately $10 million for this incident. For the fiscal year ending Nov. 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95 million or $0.11-$0.12 per share.
On Tuesday Carnival Corporation, parent company of Costa Cruises, saw its shares drop more than 14 percent in extremely heavy trading. Royal Caribbean also felt the ripples from Concordia as its shares dropped 4.5 percent.
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