Costa: Three Year Turnaround

 

Costa Crociere is expected to swing back to solid profitability in 2013, according to Howard Frank, vice chairman and COOof Carnival Corp, who spoke on the company’s Q3 earnings call. After what he called a very challenging 2012, following the Concordia incident, he said that consumer research shows that the brand is back on track in each of its major markets. But it will probably take another year or two after 2013 before Costa is back to where it was before January 2012 (Concordia).

Meanwhile, Costa is dragging the average pricing for the European brands down for Q1 2013. While both occupancy and pricing are down for Costa for Q1, Frank said that year-over-year price comparisons are narrowing.

Costa lost occupancy in 2012 because the company stopped marketing during the Wave season and only went back into the market later in the spring. Frank said that while Costa is turning around, it will take until Q2 2013 to generate stronger numbers.

Despite its difficulties, however, Micky Arison, chairman and CEO of Carnival, said that Costa  maintained and even increased its market shares in Italy, France and Spain.

According to David Bernstein, CFO and senior vice president, Costa is expected to lose nearly $100 million this year.

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