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Carnival Corp. Ups Fuel Surcharge

April 10, 2008 By: David Eisen

Carnival Corp., in a letter that went out Monday, advised travel agents that it was raising by $2 the amount of its per person per day fuel surcharge (which before stood at $5) for six of its brands, citing the “continued rapid escalation of fuel prices.” In addition, the brands— Carnival Cruise Lines, Cunard Line, Costa Cruises, Holland America Line, Princess Cruises and Seabourn— will implement a fuel supplement charge of $2 per person per day on third, fourth and fifth passengers; before the surcharge was only levied on first and second passengers.

The letter, signed by Carnival’s Director of Corporate Marketing, Bill Harber, states that the new fuel supplement outline will apply to bookings made on or after April 21, 2008, and will not exceed $98 per person per voyage for the first and second guests and $28 for the third, fourth and fifth guests. The original $5 fuel surcharge will remain for bookings made up to the 21st.

Carnival writes that it “regrets having to take this action,” but the further escalation of fuel prices provoked a “modest increase in the supplement.”

Both Carnival and Royal Caribbean have reached agreements with the Florida Attorney General’s office regarding their fuel surcharge disclosures, which resulted in refunding money back to customers. Tim Conder, managing director of leisure equity research with Wachovia Capital Markets, said that after the agreements were reached he was not surprised that Carnival took this action to raise its fuel surcharge and further believes that Royal Caribbean, in all probability, will follow suit.

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