However, the grounding of the Costa Concordia, 100 metres off the Italian island of Giglio, and the chaotic evacuation of its 4,200 passengers, raises serious questions about the safety, training and rigour in the industry. That the captain, Francisco Schettino, allegedly abandoned the 114,500-tonne, six-year-old vessel, and is now in detention for sailing off course without authorization, is worrying enough.
More troubling is the very fact that a ship of this magnitude, sailing in well-charted waters, could hit a rock, and that there were delays in the evacuation. Even the most basic precautions may not have been taken. There are reports that the ship only held safety drills every 15 days, so that not all passengers underwent a safety drill before the vessel embarked. If so, they were not briefed about the location of lifeboat muster stations and life jackets – basic and vital precautions.
Carnival had already warned in December that it had lowered its prices for 2012 cruises because of weaker demand in Europe as the euro zone crisis took its toll.
Shares in Carnival were down 16.5 percent to 1,856 pence by the close of trading, knocking nearly 700 million pounds off the company's value. Rival Royal Caribbean Cruises' (RCL.OL) (RCL.N) Oslo-listed shares ended the day down 7.7 percent.
Carnival said the Costa Concordia is expected to be out of service for at least the remainder of its financial year.
"For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95 million or $0.11-$0.12 per share."
That impact is from loss of use of the ship alone and does not take into account the likely impact on bookings. Carnival said it anticipated further costs to the business that it was too early to determine.
Costa Concordia is insured for 405 million euros by insurers including XL (XL.N), RSA (RSA.L) and Generali (GASI.MI), with specialist marine insurers providing extra cover for potential injury claims, industry sources said.
An RSA spokesperson said the company's exposure to the disaster was below 10 million euros, while a spokesperson for Generali said the impact on the company would be small. XL could not immediately be reached.
Market expectations for Carnival's earnings before interest and tax EBIT.L currently range between $2.36 billion and $2.64 billion with the average at $2.47 billion, according to a Thomson Reuters I/B/E/S poll of 11 analysts. The average forecast for earnings per shares stands at $2.67.
Carnival and Royal Caribbean account for around three-quarters of the global market.
Europe's two biggest travel companies by sales, TUI Travel (TT.L) and Thomas Cook (TCG.L), also have sizeable cruise ship businesses. Shares in TUI Travel were up 3.2 percent to 166.9 pence with Thomas Cook unchanged at 15.25 pence.
Global demand for cruises almost doubled from 9.7 million passengers in 2000 to 18.8 million in 2010 and the industry generates annual revenue of over 35 billion eurosin Europe alone.
Carnival's Chairman and Chief Executive Micky Arison said the company was prioritising the safety of its passengers and crew.
"We are deeply saddened by this tragic event and our hearts go out to everyone affected by the grounding of the Costa Concordia and especially to the families and loved ones of those who lost their lives."
Rescue workers searching the ship for missing passengers and crew recovered a sixth body on Monday.
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