ABSTRACT
In 1972, entrepreneur Ted Arison formed Carnival Cruise Lines with one second-hand ship, and only enough fuel to sail from Miami to San Juan. The largest competitors in the industry are Carnival, Royal Caribbean, and Norwegian Cruise Lines. The reduction in Carnival’s market cap greatly exceeds the direct costs to Concordia, suggesting that there were long-term concerns about the effect of the crisis on the industry in general and Carnival specifically. Costa Cruises commissioned the Costa Concordia 2004, and at the time of its launch, the Costa Concordia was the largest Italian cruise ship in history. Passenger tickets indicated that any causes of law arising from problems at sea must be brought before Italian courts and likely contain class-action protection for the cruise line and its employees. Carnival Corporation’s stock appears to have weathered the crisis relatively well, though the market has priced in a greater reduction in market capitalization than the direct effect of financial liabilities warrants.
