Sunday, 26 February 2012

CEO says media 'massacre' could destroy Costa brand

CEO says media 'massacre' could destroy Costa brand

By Donna Tunney
Costa Cruises’ bookings are down 35% year over year since the Costa Concordia accident in Italy on Jan. 13, the line’s chairman and CEO, Pier Luigi Foschi, told Italian newspaper La Stampa earlier this month.

The Foschi interview raised a specter that has not been openly discussed: that all the negative publicity surrounding the Concordia incident could ultimately sink the Costa brand.

“Our brand has been massacred by the media,” Foschi said, and even though “the company is solid, with a net worth of several billion euros,” Costa Cruises “could fail as a [brand].”

In an annual filing last month with the U.S. Securities and Exchange Commission, parent company Carnival Corp. stated that booking volume across its brands had dropped by 20% in the immediate aftermath of the Concordia incident. But that figure did not include Costa Cruises itself. In its filing, Carnival Corp. said only that Costa’s bookings were down significantly.

In a follow-up to Foschi’s statements to La Stampa, Costa issued a statement explaining, “Our chairman and CEO replied to a question regarding the possibility of bankruptcy of our company. He actually replied that although the company is financially very strong and the company will not go bankrupt, there is no certainty about the brand.

“This declaration was caused by the enormous attack of the mass media on Costa Crociere, most of it unfair and unverified. However, it is necessary to clarify that this is a remote possibility because it is our intention to work hard to do everything in our power to save the brand and to restore our credibility.”

The Concordia hit a rocky reef as it sailed north from Civitavecchia and quickly took on water. The half-submerged ship remains off the coast of the island of Giglio, where salvage crews are trying to remove its 500,000 gallons of fuel.

Twenty-one people have so far been confirmed dead in the incident, and at least 11 remain missing.