52 million $ OUCH

[sunsetme]

https://www.travelweekly.com/Cruise-Travel/Drydock-accident-to-cost-Royal-Caribbean-52-million

[sandebeach]

Yes that is an Ouch! But the article states that lost revenue for the three cancelled cruises was a part of that $52 million cost. 

[voyager70]

I would think insurance will cover at least some of the loss.

 

[The sea calls my name]

I would have thought a large part  would have fallen on the ships yards responsibilty for compensation.  

[voyager70]

2 minutes ago, The sea calls my name said:

I would have thought a large part  would have fallen on the ships yards responsibilty for compensation.  

 

I was thinking this would be the case as well.

 

[Clarea]

8 minutes ago, The sea calls my name said:

I would have thought a large part  would have fallen on the ships yards responsibilty for compensation.  

 

I believe Royal has an interest in that shipyard.

[The sea calls my name]

2 minutes ago, Host Clarea said:

 

I believe Royal has an interest in that shipyard.

Ah, here in lies the rub.

[gatour]

From my understanding Royal Caribbean does have about a 40

2 minutes ago, Host Clarea said:

 

I believe Royal has an interest in that shipyard.

I believe it is at about 40%.  I think Carnival also has an interest.  From my recollection Carnival first bought an interest and then sometime in the past Royal also bought their stake.

[GUT2407]

That’s what insurance is for

[AL3XCruise]

57 minutes ago, GUT2407 said:

That’s what insurance is for

 

1 hour ago, voyager70 said:

I would think insurance will cover at least some of the loss.

 

I believe the stated loss already takes applicable insurance into account. 

 

From RCCLs earnings press release:

 

On April 1, 2019, Royal Caribbean's Oasis of the Seas was undergoing maintenance at the Grand Bahama Shipyard when an accident involving the drydock caused two construction cranes to collapse on the stern of the ship.  The damage to the ship was extensive and the ship had to go to a dock in Europe for repairs.  As a result, the ship was taken out of service for almost a month and is expected to return back to service for its normally scheduled May 5, 2019 sailing.  The company estimates the direct financial impact of this unusual event, net of insurance, will be a reduction of approximately $0.25 per share to the company's full year Adjusted EPS, mostly driven by lost revenue.

[PhoenixCruiser]

2 hours ago, voyager70 said:

I would think insurance will cover at least some of the loss.

 

 

I thought they were self insured?

[Ashland]

Get ready for price increases for everything RCI 

[Clarea]

7 hours ago, PhoenixCruiser said:

 

I thought they were self insured?

 

I thoght I read that too.

[CRUISEFAN0001]

I also thought I had read they were self-insured.

 

To put things in perspective...a $50 Million damage cost on a $1 Billion cruise ship would be like a $1500 repair on a $30,000 car. 

[DirtyDawg]

As someone said most of that $52 million was lost revenue. The corporation had revenues of $9.5 Billion in 2018. $52 million is  .5% of its annual revenue.

 

A flea on the elephant’s backside, annoying perhaps but not an OUCH. 

 

Edited May 2, 2019 by DirtyDawg

[chengkp75]

Yes, RCI is about 40% owner of the shipyard, so any damages assessed against the yard will still come from the parent company's bottom line.

 

Not sure whether Hull insurance (typically not self-insured, like Lloyd's of London) or P&I (protection and indemnity, which is self-insured, sort of) will cover the damage to the ship.  While RCI is a member of the P&I "Club", and pays premiums to the club based on historical claims, the other shipping lines who are members of the club will spread some of the cost among themselves, but will generally raise premiums the next year to cover the loss.  Hull insurance is done by "for profit" companies (I know Liberty Mutual lost a bundle on Concordia), while P&I is a "non-profit" club, where excess premiums over claims can be returned to the members at the end of a year.

 

I don't believe that P&I will cover the lost revenue.

[Baron Barracuda]

Imagine shipyard has liability insurance.  Shouldn't matter that Royal is part owner.

[chengkp75]

1 hour ago, Baron Barracuda said:

Imagine shipyard has liability insurance.  Shouldn't matter that Royal is part owner.

True, but that means the premiums will go up, and RCI will end up paying part of those.