House Panel Opens Carnival Probe Over Cruise Ship Outbreaks

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(Bloomberg Businessweek) -- The U.S. House Committee on Transportation and Infrastructure today opened an inquiry into Carnival Corp.’s handling of the Covid-19 outbreaks that have resulted in more than 1,500 confirmed cases of the novel coronavirus aboard its cruise ships, as well as dozens of passenger and crew deaths.

In letters sent Friday to Carnival President and Chief Executive Officer Arnold Donald, the U.S. Coast Guard, and the Centers for Disease Control and Prevention, Peter DeFazio, the Oregon Democrat who chairs the committee, requested a wide-ranging collection of internal Carnival documents and correspondence related to its outbreak response, as well as specific assurances about Carnival’s plans for improvement. “We would hope that the reality of the Covid-19 pandemic will place a renewed emphasis on public health and passenger safety, but frankly that has not been seen up to this point,” DeFazio wrote in the letter to Carnival also signed by Sean Maloney, the New York Democrat who chairs the maritime transportation subcommittee. “It seems as though Carnival Corporation and its portfolio of nine cruise lines, which represents 109 cruise ships, is still trying to sell this cruise line fantasy and ignoring the public health threat.”

The congressional probe, which cites Bloomberg Businessweek’s recent cover story detailing Carnival’s challenges and delays in addressing the Covid-19 outbreaks, marks a serious turning point for the Florida company. Since early February, at least nine of its cruise ships have suffered from coronavirus outbreaks, raising significant questions about corporate negligence and Carnival’s fleet safety. “Recent allegations by a media report in Bloomberg are quite disturbing,” the letter to Carnival reads. “They suggest that officials at Carnival were aware of the threats to some of its ships and did not take appropriate actions, which may have led to greater infections and the spread of the disease.”

Carnival said in an emailed statement that it’s reviewing the letter and will fully cooperate with the committee. “Our goal is the same as the committee's goal,” the company said, “to protect the health, safety and well-being of our guests and crew, along with compliance and environmental protection.”

Donald has said his company made every effort to protect its passengers and that the team’s response was reasonable under the circumstances. “This is a generational global event—it’s unprecedented,” the CEO said in an April 1 interview.

The coronavirus pandemic brought the cruise industry, gradually, to a halt. Carnival, the world’s largest cruise line company, has temporarily paused all voyages, and its stock has declined as much as 75% this year. Ships operated by Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. also suffered outbreaks before they dropped anchor, though at a smaller scale than Carnival’s.

Australian police have launched a criminal probe into whether Carnival’s Princess Cruises subsidiary misled authorities about an outbreak aboard a ship docked in Sydney. Both Princess and its Costa Cruises subsidiary are facing passenger lawsuits regarding the company’s Covid-19 response, too. Princess has said it is cooperating with the Australian investigation, while Costa has said it’s prepared to “vigorously defend ourselves.”

As part of the congressional inquiry, DeFazio’s committee, which has been leading the House investigation into the design and safety errors that resulted in two fatal crashes of Boeing Co.’s 737 Max planes, has also asked for copies of Carnival’s 2020 fleet outbreak prevention plans, its strategy to prevent Covid-19’s spread, and all internal records of employees and ship officers discussing the threat of coronavirus. The committee requested that Carnival begin delivering records by May 15.

©2020 Bloomberg L.P.

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