Carnival CEO defends cruise ship deal for storm refugees
Published: Saturday, October 1, 2005 at 6:01 a.m.
Last Modified: Friday, September 30, 2005 at 11:16 p.m.
FORT LAUDERDALE - Carnival Corp. CEO Micky Arison defended his company's $236 million contract with the federal government to use cruise ships to house hurricane victims, denying reports Friday that the vessels were mostly empty.
U.S. Sens. Tom Coburn, R-Okla., and Barack Obama, D-Ill., called it a "sweetheart" deal in a letter Thursday asking Homeland Security Secretary Michael Chertoff to explain the contract with the Miami-based company.
The senators alleged the contract guaranteed the Carnival Cruise Lines brand rates that were much higher than market levels. The company has said it doesn't expect to make a profit on the deal.
"What we asked for was to be kept whole basically. And to make up for the revenue that we would have made had the ships been operated. And to pay for the expense of canceling 100,000 people and protecting travel agent commissions," Arison said at a cruise industry convention.
The Sensation and Ecstasy have been used to house emergency workers in New Orleans. Each ship can hold 2,052 people, and Arison said one had only 50 empty cabins and another had 150 vacancies. He said 1,000 evacuees were in Mobile, Ala., on the Holiday, which can hold 1,452 people.
The senators also asked Chertoff to explain why the U.S. didn't accept Greece's offer to send two ships for free. Gov. Jeb Bush's office said those ships wouldn't have arrived until Oct. 10.
Bush said the contract might be an example of government waste. He applauded Carnival's willingness to cancel cruises to aid relief efforts and said "no good deed goes unpunished."
Arison said he was "extremely proud" of Carnival Cruise Lines for taking the ships out of normal service on short notice for hurricane victims. Workers rushed to cancel the cruises for 100,000 passengers, but it was worth it to help first responders, he said.
"Before those ships arrived, those guys had lost their homes, they were trying to police New Orleans without water, without food, without roofs over their head and they're now living on board the Carnival ships," he said.
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