Catastrophic crisis only varies in intensity and enormity — apply the same strategies

Google Carnival Cruise lines today looking for a sunny getaway in the Caribbean or Mexico in March and a tragic sight pops up, a massive white luxury ship capable of carrying 4,200 passengers and crew lying on its side in azure water, looking like the beached white whale it is.

The image represents a catastrophic crisis — corporate Armageddon. Tylenol. BP. Three Mile Island. Exxon Valdez. Flight 3407.  Bhopal. These crises change, even mortally wound, whole industries. They are so profound that just mentioning their one- or two-word names reignites their horrific impacts. Cruise Ship Costa Concordia Runs Aground Off Giglio

Now comes to that list the Costa Concordia‘s grounding off Italy’s Tuscan coast. Operated by Costa Crociere, a division of Miami-based Carnival Cruise Lines, the ship sank in shallow water and it appears that 20 people died.

Bloomberg News jumped right on the economic impact, the tragedy coming at the start of peak cruise season.

The actual impact is nearly bottomless. Titanic became a word after 1912 to describe a huge event. This is titanic — eerie incident parallels to the Titanic and all. Lawsuits, public scorn, media ridicule and government investigations will only be appetizers. Cruise lines can expect at least a year and maybe as many as two or three years of reduced bookings.

This is a multi-billion-dollar mistake. Insurance claims alone, Bloomberg noted, could reach beyond $500 million. In 2011, Carnival had $15.9 billion in revenues; even a 20 percent one-year drop off would be $3.2 billion. That doesn’t include what investors will do to the stock today.

Impact? WBEN’s daily spot poll in Buffalo, a prime market for cruise passengers, reflects and projects the fear and anger. Of 230 people polled online, 40 percent said they’d now avoid a cruise. If the same question were asked last Friday, in the midst of a winter storm, 90 percent would crave a cruise.

Faced with almost impossible challenges, Costa Crociere Chairman and CEO Pier Luigi Foschi made his captain walk the plank, rather than offer to take corporate responsibility. The captain, Francesco  Schettino, faces possible manslaughter charges and allegations he abandoned ship before the passengers were safe, violating the  Italian navigation code. The AP story has more detail:

Earlier, Costa Crociere President Gianni Onorato did appropriately apologize: “I want to express our deep sorrow for this terrible tragedy. I am only now able to speak on behalf of Costa because, as you will understand, I have been at Isola del Giglio to be close to the rescue operations.”

All crises seem to threaten your livelihood and company’s future. Something like this surely does. Have a crisis plan in place — as Carnival must — and run with it. The nightmare will end someday.


About steveoncrisis

The content is about crisis management and mismanagement in a digital age. It comes from Steve Bell, who spent 30 years as a journalist for the Associated Press and as managing editor and editorial page editor at The Buffalo News. He is now Partner/Director of Public Affairs at Eric Mower and Associates, one of the nation's largest independent advertising, integrated marketing and public relations agency with six offices in the Northeast and Southeast.
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