It's been a rocky ride for Carnival Cruise Lines after several high-profile mishaps in recent years. Now the company is spending more than half-a-billion dollars for improvements to right the ship.
Arnold Donald, the new chief executive officer of Carnival -- on the job for less than nine weeks -- recently sat down with CBS News travel editor Peter Greenberg to discuss the company's recent issues and improvements in the works at the largest cruise line in the world.
Last year, Costa Concordia -- a Carnival-owned ship -- ran aground off the coast of Italy, killing 32 people on board. Speaking of that event, Donald said, "It was not any infrastructure or systemic problem that produced the Concordia. It was a one-off unbelievable error in judgment, and it was a tragedy."
Then, this past February, an engine room fire left the Carnival Triumph powerless and adrift for days in the Gulf of Mexico without air conditioning or working toilets. It was a public relations disaster for Carnival.
Greenberg asked Donald, "How do you get ahead of that story?"
"Obviously we didn't," Donald said. "In the future, the way to get ahead of it is to not have it happen."
Donald took over as chief executive officer of Carnival after bookings fell, shares plummeted, and some passengers sued.
Greenberg said, "The good news with the Triumph is you got the fire out and nobody died."
Donald replied, "Not only did no one die, no one was hurt, no one was sick, so there was no safety health issue involved with the Triumph at all."
But it forced Carnival to take a hard look at the design of its ships and safety systems. As a result, the company is spending upwards of $600 million to upgrade its fleet.
Donald said, "In the highly unlikely event we should ever lose power again we'd be able to have a system to back that up and we'd have a process to keep from losing power in the first place."
Carnival Cruise Lines' new vice president of technical operations Mark Jackson -- a former Coast Guard commander -- came on board in April to turn things around. Jackson said, "What happened on Triumph is horrible for our guests and we never want that to happen again, but unfortunately it's something that we learned the hard way."
The first order of business -- rerouting 63 miles of cable, so that a fire would be less likely to take out both engine rooms, as it did on the Triumph. Jackson said, "If one room is lost, we don't lose the other."
Then it was fire suppression -- increasing the number of water mist nozzles from roughly 30 to about 500, and adding a 24/7 manned patrol to look for oil or fuel leaks. And finally, installing a second backup generator, nowhere near the engine room -- just in case. That way, basic services would stay up and running, which, for a ship that size, is no small task.
Despite the bad PR, the statistics are still overwhelmingly in passengers' favor. Donald said, "Keep in mind, these incidents represent far less than one percent of the experience with all our guests."
Still, as consumer confidence tumbled the line began offering deep discounts to get people on board, in some cases slashing fares to just $149 per cruise.
But cruise ship economics are unforgiving, it's not what the passengers pay to book their cruise that counts, it's what they spend once they're on board that moves the bottom line.
The bottom line for Donald now is to reposition Carnival, rebuild its reputation, and fill his ships.
By CBS News
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