1 The Costa Concordia Crisis
A Case Analysis of the Sinking Cruise Ship
Source: TheAtlantic.com
PRCM 3050 Group Case Study
December 1, 2015
Sarah Lenahan
Margaret Minium
Nadia Niakossary
Ashlyn Perez
2 Table of Contents
3
Overview
3
Introduction to Carnival Corporation
4
Introduction to Costa Cruises and the Costa Concordia
5
Research
7
Strategy
8
Tactics
10
Evaluation/Continuation
12
Conclusion
13
References
3 Overview
Facts on cruise ship accidents are almost impossible to find. In the past, cruise mishaps did not
commonly make the news, but in the age of social media and instant information, reporting about them,
professionally or recreationally, is more frequent. Even with information being more readily available,
there is a lack of systematically collected data about accidents involving cruise ships, (Rosenbloom,
2013). The case of the Costa Concordia was chosen to study because of the large amount of media
coverage it received, and it is a study into the crisis management of the situation.
On January 13, 2012, an Italian cruise ship, the Costa Concordia, began a seven-day cruise
(Arthur W. Page Society, p. 6). The ship struck an underwater reef off the coast of Isola del Giglia,
Tuscany, Italy (Arthur W. Page Society, p. 6). After initial impact, the ship continued to move, either
because of inertia or prevailing winds, until it was grounded at Punta del Gabbianara (Di Lieto, 2012).
According to the Arthur W. Page Society, crew members reported the problem as an “electrical
failure” to stop passengers from panicking and later directed them to return to their cabins (p. 6). It was
not until the ship had begun to sink that evacuation procedures were initiated (p. 7). While evacuating the
ship, 32 were killed and another 150 were injured, including serious injuries such as partial paralysis,
amputations and blindness (as cited in Michelson, 2014, p. 17).
The Costa Concordia was owned and ran by Costa Cruises, which is owned by the cruise
conglomerate Carnival Corporation & plc (Carnival) (Carnival Corporation, 2015). Costa Cruises faced
scrutiny for its handling of the situation, especially after it became known that the captain had abandoned
the ship while passengers and crew were still onboard, a maritime crime under Italian law (Arthur W.
Page Society, p. 7).
Introduction to Carnival Corporation
Carnival Cruise Lines was started by Ted Arison and began operating in 1972, according to their
corporate website (2015). It is now operating as part of the Carnival Corporation & plc (Carnival)
conglomerate. The launch of Carnival is “a classic tale of the American Dream” (2015). It is the world’s
biggest cruise ship company with 101 ships sailing under 10 different brands, including Princess, Cunard
4 and Costa, and it employs over 100,000 people worldwide (2015). Its biggest competitor is Royal
Caribbean (Michelson, 2014, p. 13).
Carnival’s corporate website states its mission statement:
Our mission is to take the world on vacation and deliver exceptional experiences through many of
the world’s best-known cruise brands that cater to a variety of different geographic regions and
lifestyles, all at an outstanding value unrivaled on land or at sea. (2105)
Carnival deemed itself “The World’s Most Popular Cruise Line,” and based on passenger
volume, it was the “most popular” and accounted for an estimated 51.6 percent of worldwide cruising
revenue in 2011 (Arthur W. Page Society, p. 3). The company attributed its success to its “ability to
manage brand autonomy, with each major cruise line maintaining separate sales, marketing and
reservation offices, as well as through the industry’s most aggressive shipbuilding program” (as cited in
Arthur W. Page Society, p.3).
Introduction to Costa Cruises and the Costa Concordia
Costa Cruises (Costa) originated in 1854 as a shipping company based in Genoa, Italy, under the
name of its founder, Giacomo Costa fu Andrea. Primarily engaged in the trade of fabric and olive oil
between Genoa and Sardinia, the company grew its fleet to eight ships by the time that World War II
started (Arthur W. Page Society, p. 3).
In 1987, the cargo company consolidated its cruise ships into a new company, Costa Cruises.
The company was purchased in 1997 by Carnival and Airtours, an English-owned travel company.
Carnival purchased all of Airtours’ ownership in the company in September 2000 and became its sole
proprietor. According to Carnival’s website, Costa was Europe’s number one cruise operator when they
purchased it (p. 4).
Carnival ordered the Costa Concordia in January 2004. Built in Genoa, Italy, it was conceived to
be the largest Italian cruise ship ever constructed and cost $570 million. It had 13 decks, 505 private
balconies, the world’s largest exercise facility at sea, a spa, four swimming pools, five restaurants, 13
bars, a theater, a casino, a nightclub and 1,500 cabins. At the time of the collision, the ship was carrying
3,229 passengers and 1,203 crew members (p.4).
5 Research
In January 13, 2012, the Costa Concordia set sail from Civitacchia, Italy under the command of
Captain Francesco Schettino. The seven-day cruise was set to visit the ports of Savona, Marseille,
Barcelona, Palma, Cagliara and Palermo before returning to Civitacchia (Arthur W. Page Society, p. 6).
Schettino manually disabled the alarm system for the ship’s computer navigation system in order to
conduct a close sail-past of the island of Giglio at the request of the restaurant manager (Di Lieto, p. 2).
This was the first of the mistakes attributed to the captain that led to the accident.
Having conducted similar sail-pasts of the island in the past, Captain Schettino said in later
interviews that he was navigating by sight because he knows the seabeds [sic] well. Upon seeing waves
breaking on the reef, he ordered the ship to be turned abruptly, which caused the side of the hull into the
reef (Arthur W. Page Society, p. 6). This resulted in a 160-foot gash below the water line in the
Concordia’s port (left) side. It cut steel from the ship’s hull and lodged a rock in the aft (back) end of the
gash (Michelson, 2014, p. 16).
The head of the engine room claimed that within minutes, the generator and ship were
underwater. After this, the ship relied solely on backup emergency electric power, and only the remaining
inertia of the ship enabled it to continue to sail past Giglio Porto (Di Lieto, p. 2). At 10:44 p.m. the ship
came to a final rest at a 70-degree angle, partially submerged in 20 meters of water (Arthur W. Page
Society, p. 6).
At the time of the collision, most passengers were dining in one of the ship’s restaurants. A voice
over the intercom attributed the loud bang that the crash caused to an electrical failure, and crew and
employees told guests that everything was okay. Before the official evacuation order was given, a
passenger recorded a video of crew members telling passengers that the problem was solved and to return
to their cabins (p. 6).
Probably as a result of the panic and confusion, there are varying accounts of what happened
during the eventual evacuation. The passengers did not participate in a required evacuation drill prior to
the accident, and passengers described a chaotic and disorganized evacuation process. This later added to
6 the criticism about how Costa teaches their employees and led to questions about the kind of corporate
culture promoted by the company.
The listing of the cruise ship made it difficult to launch the lifeboats, and there are reports that
some passengers jumped in the water to escape the sinking ship. Costa CEO Pier Luigi Foschi attributed
the crew’s lack of preparation to poor leadership from the ship’s officers and a language barrier (Arthur
W. Page Society, p. 7). While this might have been true, Foschi had no definitive way of knowing that at
the time. He should have focused more on how the company was going to handle the problem and less on
finding someone to blame.
The main publics affected were the people present on the ship at the time and their family and
friends. Costa immediately addressed this public with their search efforts, and later with compensation to
those affected.
Costa’s employees were an important public. The employees on the Costa Concordia were
criticized for their handling of the situation, and the competence of the employees on all their ships was
called into question.
Shareholders in both Carnival and Costa were affected. In the first couple of months following
the accident, both companies suffered from a decrease in bookings, which led to a decrease in stock
worth. However, in the five weeks leading up to April 1, 2012, Frank reported that bookings had
increased 3 percent. In May 2012, Foschi told The Independent that bookings were higher than they
forecasted and higher than they were in the previous year. “The customers who knew us in the past have
been loyal,” he said.
Another public includes customers, past and present. The incident probably had an affect on
decisions to book cruises. Additionally, the press given to the crisis might have made people aware of
Costa Cruises who were previously unaware of its existence (Arthur W. Page, p. 24).
The general public, the people to whom the news reporters were giving their information, were
also a public. It is speculated that the event did not have an affect on the majority of the general public.
7 Strategy
Costa Concordia’s strategies for crisis management were mostly to state facts rather than to start a
conversation with their publics. Their objectives were focusing on addressing what happened rather than
communicate for damage control. All specific tactics for the company’s strategy are explained and
referenced in the Tactics section below.
Their action strategy began with informing their publics. They wanted to relay what was
happening and did not want to appear as if they were hiding anything. Their tactic to this strategy was
having an official executive from Carnival send out a Tweet to address that they realize the crisis
happened.
Their next move was publishing a news release from Carnival that stated facts about the accident.
Their action strategy to inform their stakeholders and publics was necessary, however they did not have
an effective response strategy. The timeliness of their responses was insensitive to the families affected by
the crisis.
The company’s communication strategy was almost nonexistent. Their media presence was
lacking a spokesperson to give information on what was happening. The day after the incident, Carnival
addressed the media with a news conference. Their tactic with the news release was to inform their
publics about how they are handling the affected families. They also closed their social media
communication with their publics. This “no comment” strategy was thoughtless at the peak time of their
crisis management plan.
Overall, Costa and Carnival’s strategies for action, response and communication were ineffective
in managing the crisis. They should have been timelier in their responses while taking full responsibility
for the damage done. They also should have picked a credible spokesperson to relay information and
communicate with the publics with one clear voice.
8 Tactics
Both Costa and Carnival. have been widely criticized for their handling of the disaster
surrounding the Costa Concordia. Carnival and Costa handeled this crisis slowly and with inconsistency,
insensitivity and impersonal distance.
Carnival’s first response to the disaster came from CEO Mickey Arison’s personal Twitter
account on January 14, 2012 at 4:42 a.m. Central European Time (CET), “Tonight our thoughts and
prayers are with the passengers and crew of the Costa Concordia” (Arison, 2012).
After this, an official statement was not released until January 14, 2012, at 9:44 p.m. CET when
Carnival published a news release. The news release succinctly stated the facts of the incident, said they
were “saddened” by the tragedy, ensured that all guests and crew would be looked after and thanked the
Italian Coast Guard and local authorities (Carnival Corporation & plc, 2012).
This release was viewed as untimely and impersonal. Carnival waited almost a full 24 hours after
the disaster occurred before making an official statement. In addition, the statement only stated succinct
facts and did not quote a specific person causing it to be viewed as impersonal.
Allyson Stewart-Allen, director of consulting firm International Marketing Partners ranked
Carnival’s public relations strategy a four on a scale of one to 10, with 10 being “outstanding.” StewartAllen explained, “It wasn't quick, it wasn't specific, it wasn't reassuring” (Geller, 2012).
After his initial Tweet, Arison was not heard from for 10 days. The Wall Street Journal published
an article on January 23, 2012 titled “Carnival CEO Lies Low After Wreck: Where is Micky Arison?”(
Esterl & Lublin, 2012). Evan Nierman, founder of Florida public relations firm Red Banyan Group,
commented on Arison’s response, saying, "If he's the point person, I would want a constant flow of
information - Twitter, Facebook, talking to reporters, letting them know what's going on. I would have
him out there in a real way. He needs to be in front of cameras, he needs to be meeting with people, he
needs to show that he's in charge of the situation" (Geller, 2012).
On January 18, 2012 Carnival published a news release detailing that they have arranged lodging
and transportation for all affected passengers and crew members, are contacting the family of every
9 passenger and crew member to offer assistance, refunding all voyage costs and offering a 30 percent
discount on future Costa cruises. (Carnival Corporation & plc, 2012) However, one survivor commented
on this saying, “It is a ridiculous and insulting offer” (Russell, 2012).
While all of this was going on, Costa Concordia Captain Francesco Schettino was arrested
immediately after the disaster in the early hours of January 14, 2012 for abandoning ship while at least
100 people were still on board (Winfield & Barry, 2012). Costa CEO Pier Luigi Foschi was quoted
blaming the disaster on an “inexplicable” error by the captain (Spillman, 2012).
Eventually, on January 19, 2012 Carnival posted this message on their Facebook page, "Out of
respect for all those affected by the recent events surrounding our sister line, Costa Cruises, we are going
to take a bit of a break from posting on our social channels" (Engler, 2012). In addition, Carnival CEO
Micky Arison posted this message on his personal Twitter account, "I won't be as active on Twitter for
the next while. Helping our @costacruises team manage this crisis is my priority right now. Thnx”
(Engler, 2012 ).
The only apparent tactic employed by Carnival coincides with step six of the fundamental
guidelines of crisis management outlined in Public Relations Practices: Managerial Case Studies and
Problems, “Do not speculate on the cause, the cost, or anything else. Provide information about only what
is known” (Center, Jackson, Smith, & Stansberry, 2014). However, Carnival took this tactic too literally
and was consequently reprimanded in the media.
10 Evaluation/Continuation
A main point of scrutiny is in the aftermath of the accident were the actions of Schettino. The
captain abandoned ship before securing the safety of any of the passengers and ignored direct orders from
an Italian Coast Guard to return to the ship. An Italian newspaper reported that Schettino had three phone
calls with Costa’s crisis management officer, the first occurring 68 minutes before the official order to
evacuate (Arthur W. Page Society, p. 7). The company tried to distance themselves from the captain,
despite having promoted him from within to the position of captain and entrusting him with a cruise ship
that was worth hundreds of millions of dollars. This made the company seem incompetent in its hiring
and promotion practices.
Costa did not appear to have any type of plan in place for emergencies such as these. It was two
days after the wreck before they released a statement. In the statement that they did release, they blamed
the accident on significant human error of Schettino and his crew, and despite claiming their priority is to
account for all those on the ship and ensure there are no environmental impacts, Costa did not take
responsibility as a company.
Costa held a press conference headed by unprepared CEO Foschi on Monday, January 16, 2012.
The press conference was short, and Foschi made very general and vague statements. The main point of
his message was about the policies, procedures and physical training that Costa employees must undergo,
but he did not provide qualifying details.
The company also only allowed for written, not verbal, questions (Camp, 2012). This offered the
company a large element of control. Though presented as being a translation and language issue, this gave
the perception that Foschi was not prepared to answer live questions. The company put the press
conference on their YouTube channel, but disabled the comment sections, making it seem as if they could
not handle how the public might react and that they did not necessarily believe their own words.
Ten days after the wreck, The Wall Street Journal reported that Carnival declined a request to talk
to Mark Arison. Ten days after the wreck, Chief Operating Officer Howard Frank was sent to Italy to
assist the Costa executive team (Arthur W. Page, p. 23).
11 Outside of the initial press release and social media posts, Carnival remained silent on the
situation. This is probably because while Carnival is the parent company, Costa operated as a wholly
owned subsidiary (Arthur W. Page, p. 4). Carnival was not legally liable for anything because it was not
the owner or operator of the ship. However, ethically, they should have at least commented on the crisis
and what, if anything, they were doing to help the situation or make sure it does not happen in any of their
subsidiaries again.
The only way Carnival communicated with stakeholders was through social media, before
announcing that it would take a break from social media to focus on those affected by the accident
(Michelson, 2014, p. 19). Their lack of involvement in the management of the was highly criticized.
Arison was personally criticized for what was called his lack of interest. As far as the public was
concerned, he was continuing his daily life, going to basketball games and spending time on his yacht,
and that made him seem callous to the situation. In June 2013, Arison stepped down from his position of
CEO (Michelson, 2014, p. 19).
There are many things that Carnival should have done differently. First, they should have spoken
with one voice. Carnival’s CEO first attempted to speak directly to the public via his Twitter account;
however, he went silent after one tweet. This, in conjunction with an impersonal tone in Carnival’s press
releases, provided an inconsistent face to the media.
Next, they should have been quick with their response. A large corporation like Carnival should
already have a crisis contingency plan in place so that they are prepared if something like this were to
happen. Waiting 24 hours after the fact is too long to leave the public guessing.
Finally, they should have taken responsibility for their mistakes. In the beginning statements,
Carnival appeared to defend the Captain before subsequently acknowledging his fault and blaming the
disaster on him (Spillman, 2012) While this crisis was majorly due to human error, a large cause was also
error in management and Carnival should have immediately acknowledged fault and apologized.
12 Conclusion
In conclusion, the incredibly irresponsible and selfish action of Caption Schettino led to one of
the most widely scrutinized crisis in public relations history. Costa Cruises and Carnival Cruise Line both
failed their publics by attempting to place blame on a single individual instead of dealing with the
situation in a timely, conscientious manner. Had Costa Cruises and Carnival Cruise Line worked together
in their efforts, things may have played out much better for each company. By having more than one
voice, responding to the crisis in an untimely fashion, and not taking full responsibility for the crisis,
Costa Cruises and Carnival Cruise Line became a notorious example of poor crisis management and
ineffective communication during a tragedy.
Costa Cruises and Carnival Cruise Line should develop a crisis management plan in the chance
that this situation may arise again. They both need to be ready to handle a crisis of this caliber and do so
in an organized, professional manner. In order to better their efforts, each company must practice
effective communication with their publics by being open and honest and preparing readily available facts
and statements for the media. They need to be consistent in their tone and voice and elect one official
spokesperson to handle all crisis communication. It is very important that in the future they respond to a
crisis within hours instead of waiting 24 hours to release a statement. Finally, although Captain Shettino’s
actions were viewed as despicable, Carnival Cruise Line and Costa Cruises need to accept full
responsibility for any poor action made by any employee and not place blame on any one individual.
13 References:
Arison, M. (@MickyArison) “Tonight our thoughts and prayers are with the passengers and crew of the
CostaConcordia.” 13 January 2012, 9:42 p.m. CT. Tweet.
Arthur W. Page Society. Carnival Corporation: The Costa Concordia Crisis Case A, (n.d.). Arthur W.
Page Society. Retrieved from http://www.awpagesociety.com/wpcontent/uploads/2013/03/Carnival- Corporation-Case-A-and-B.pdf
Arthur W. Page Society. Carnival Corporation: The Costa Concordia Crisis Case B, (n.d.). Arthur W.
Page Society. Retrieved from http://www.awpagesociety.com/wpcontent/uploads/2013/03/Carnival- Corporation-Case-A-and-B.pdf
Camp, S. V. (2012). PR Lessons to Be Learned From the Costa Concordia Tragedy. PR News. Retrieved
from http://www.prnewsonline.com/featured/2012/01/23/pr-lessons-to-be-learned-from-thecosta-concordia-tragedy/
Carnival Corporation & plc. (2012). Carnival Corporation & plc Statement Regarding Costa Concordia.
Retrieved from http://phx.corporate-ir.net/phoenix.zhtml?c=200767&p=irolnewsArticle&ID=1648204
Carnival Corporation & plc. (2015). Mission & History. Retrieved from www.carnivalcorp.com
Costa Concordia - update (2012). Costa Crociere website. Retrieved from
http://www.costacruise.com/B2C/EU/Info/concordia_statement.htm
Costa Cruises statements on the Concordia ship disaster. (2012, Jan. 15). The Guardian. Retrieved from
http://www.theguardian.com/world/2012/jan/15/costa-cruises-concordia-ship-disaster
Di Lieto, A. (2012, July 10). Costa Concordia: Anatomy of an organisational accident. University of
Tasmania. Retrieved from http://www.enavinternational.com/wosmedia/273/costaconcordiaanatomyofanorganisationalaccident.pdf
Engler, G. (2012, February 14) Retreat from Social Media Backfires on Carnival After Italy Ship
Disaster. Advertising Age. Retrieved from http://adage.com/article/digitalnext/post-disasterretreat-social-media-backfires-carnival/232723/
Esterl, M. & Lublin, J.S. (2012, January 23). Carnival CEO Lies Low After Wreck: Where is
MickyArison? The Wall Street Journal. Retrieved from
http://www.wsj.com/articles/SB10001424052970204624204577177131752006116
Geller, M. (2012, January 19). Costa Concordia owner offers refunds, but gets low marks
for response. The Christian Science Monitor. Retrieved from http://www.csmonitor.com/World/LatestNews-Wires/2012/0119/Costa-Concordia-owner-offers-refunds-but-gets-low-marks-for-response
Lazarus, N. (2012, January 17). Cruise Company Execs Respond to Costa Concordia Tragedy. PR
Newser. Retrieved from http://www.adweek.com/prnewser/cruise-company-execs-respond-tocosta-concordia-tragedy/33679
14 Michelson, A. R. (2014). A Sinking Ship: An Extensive Crisis Communications Case Study of Carnival
Cruise Lines. Syracuse University Honors Program Capstone Projects, Paper 794. Retrieved
from http://surface.syr.edu/cgi/viewcontent.cgi?article=1787&context=honors_capstone
Regarding Costa Concordia [News Release]. Retrieved from http://phx.corporate
ir.net/phoenix.zhtml?c=200767&p=irol-newsArticle&ID=1648204
Reiterate Commitment to Support costa Concordia Passengers and Crew [News Release]. Retrieved from
http://phx.corporate-ir.net/phoenix.zhtml?c=200767&p=irolnewsArticle&ID=1650164&highlight
Rosenbloom, S. (2013, May 8). How Normal Are Cruise Mishaps?. The New York Times. Retrieved
from: http://www.nytimes.com/2013/05/12/travel/cruise-mishaps-how-normal-arethey.html?_r=0
Russell, M. (2012, January 23). Costa Concordia Survivors Offered 30% Discount On Next Costa Cruise.
Business Insider. Retrieved from http://www.businessinsider.com/costa-concordia-survivorsoffered-30-discount-on-future-costa-cruise-2012-1
Spilman, R. ( 2012, January 17). The Costa Concordia’s Fatal Salute – “Inexplicable Error” or “Nice
Tradition”? The Old Salt Blog. Retrieved from http://www.oldsaltblog.com/2012/01/the-fatalsalute-by-the-costa-concordia-inexplicable-error-or-nice-tradition/
Winfield, N. & Barry, C. (2012, January 19). Costa Concordia captain: I fell off boat, didn’t abandon. 3
News. Retrieved from http://www.3news.co.nz/world/costa-concordia-captain-i-fell-off-boatdidnt-abandon-2012011912#ixzz3sw2z2cjn