Carnival CEO says charging passengers an extra fee to help cover rising fuel costs is 'certainly not off the table'
- Carnival's CEO said a fuel surcharge is "certainly not off the table" during an earnings call.
- He said it's not something the company is planning on doing imminently, however.
If you think filling up your car's tank is expensive, imagine the gas bill for 80-plus cruise ships.
Just like the rest of us, Carnival Corporation is spending a lot of money on fuel nowadays — and cruise passengers could end up paying extra for it.
Carnival CEO Josh Weinstein said Friday that a surcharge is "certainly not off the table."
Carnival said it expected a net impact of $130 million in the fourth quarter due to rising fuel costs and unfavorable currency exchange rates. Weinstein said there had only been one other period in the last 15 years that the company's fuel costs had reached current levels.
"There are certainly considerations that have to be made about what's the norm in society with the expectations of our customer," Weinstein said. He said a fuel surcharge wouldn't be implemented in the near term, and it would only impact future bookings, rather than applied retroactively.
A Carnival spokesperson said the company has nothing to add beyond what Weinstein said on the third-quarter earnings call.
Carnival reserves the right to charge a "fuel supplement" fee of up to $9 per person per day without prior notice if the price of crude oil rises above $70 per barrel, according to Carnival's contract of carriage, the legal agreement passengers sign when purchasing a ticket. Carnival can charge the fee at the time of sailing, even if the fare has already been paid in full, the contract says.
Oil prices have exceeded that $70 benchmark for the majority of this year. As of Monday afternoon, the price of crude oil was listed at around $90 a barrel on the New York Mercantile Exchange Index.
While charging customers a fee would be a temporary fix to help offset rising fuel costs, Weinstein said the cruise giant's long-term goal is to reduce overall fuel consumption, an effort he said saved Carnival $375 million this year.
"We continue to work aggressively to manage fuel costs the best way possible by consuming less," he said on the Friday earnings call. "I know this is stating the obvious, but not only is this effort benefiting our bottom line by hundreds of millions of dollars, it's also better for the environment."
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