11/02/12, 21:23:15 EST

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High fuel prices hit cruise ship operators

caymannetnews.com

The record rises in oil prices are about to hit cruise ship operators where it hurts most, in their pockets.

The world’s biggest cruise ship operator, Carnival Corp, has just become the first major cruise company to impose a fuel surcharge of US$5 per day to help them cope with the soaring cost of fuel.

The surcharge, which will be applied to fares for cruises starting after 1 February 2008, will be paid by all passengers visiting Grand Cayman on vessels operated by Carnival’s North American operation, which includes Carnival Cruise Lines, Princess Cruises, Holland America Line, Cunard Line and Costa Cruises.

However, other operators coming to George Town, including Disney Cruise Line, Celebrity Cruises and Royal Caribbean Cruises, have yet to make a decision on whether to add fuel surcharges to their fares. Royal Caribbean who, along with Celebrity, operate a number of vessels powered by gas turbine engines rather than the traditional diesels, are understood to discuss the problem on a regular basis but have never found the need to impose additional charges.

Interestingly, Carnival’s UK-based operation, which includes P&O, Ocean Village and AIDA whose vessels regularly visit Grand Cayman, are reported not to be imposing the fuel surcharge.

Where applicable, the surcharge is capped at US$70 per person per voyage, and only applies to the first two occupants of any cabin making the maximum amount charged just US$140.

However, the impact on the industry could, according to one insider, be significant.

“Cruise lines are already struggling to fill cabins, and with seven-day cruises often on offer for between US$400 and US$500, this represents a substantial increase,” he pointed out, suggesting that the decision not to absorb the increasing fuel costs indicates that some cruise lines are currently operating on very tight profit margins.

On that subject, he speculated that cruise ships, who are already under fire for trying to push payments to local watersports companies below the point where they cover their actual costs of operation, might find high fuel prices causing other problems. “Cruise ship operators are heavily reliant on profits from onboard or advance sales of things like Stingray City trips, but the watersports operators are also being hit by the high cost of fuel and, sooner or later, are going have to start putting their prices up or go out of business,” he warned.

The high fuel costs may also restrict moves to clean up exhaust emissions from diesel-powered cruise ships.

Environmental groups have been pushing the cruise industry for the introduction of much cleaner, but far more expensive, fuels for over a year.

Environmental group Oceana reports that the fuel consumption of a cruise ship is equivalent to 12,000 vehicles, with emissions exacerbated by the type of fuel used by the majority of these vessels.

They claim that cruise ships tend to use lower quality fuel, made up of the heavier hydrocarbon residues that are left over following the crude oil refining process, which produces higher quality fuels such as petrol or light oils, to keep costs down, but this fuel also contains the most contaminants.

Oceana say the smoke from burning fuel in cruise ship engines contains suspended particles, sulphurs and carbon and nitrogen oxides including NOx, SO2, CO and CO2 or polycyclic aromatic hydrocarbons (PAHs).

Even while stationery, they say this fuel is burned to maintain all the electrical systems of what is effectively a floating city and the electrically powered thrusters, which are essential to keep vessels anchored off Grand Cayman from swinging on their moorings.

In addition, according to Oceana, air pollution is also caused by waste incinerated on board, with highly-toxic substances including polychlorate biphenyls (PCBs), dioxins and furans being detected in smoke from fuel-burning.

Cruise ships docked in George Town are regularly seen emitting large amounts of black smoke while at anchor.

When Cayman Net News approached Carnival querying why one of their vessels was belching black smoke into the atmosphere, the official response was initially that the emissions were caused during adjustments to the engine and only lasted a very short while.

However, the emissions were visible at 8:00 pm and still evident over five hours later. Another Carnival vessel, moored less than half-a-mile, produced little or no smoke during that same period.

In response to a second enquiry, Carnival confirmed that the smoke was caused by engine work and denied suggestions, made by a member of the public, that they were burning trash while in harbour.
Quite why they had chosen to undertake this work while in Cayman waters was never explained, nor is it clear why the same vessel produced similar amounts of smoke during subsequent visits.

 Printable Version  | published Nov 13, 2007