Carnival Brands Noted Possible Fuel Charges in Contracts, Analyst Says

Carnival Corp. cruise brands have included disclosures about potential fuel surcharges in their sales contracts for the last two years, according to a UBS Investment Research note.

This may explain why Royal Caribbean Cruises Ltd. chose to settle with the Florida attorney general’s office about returning fuel surcharges, while Carnival has not yet done so, wrote UBS analyst Robin Farley in a note.

Farley suggested that the attorney general might have settled first with RCCL to attempt to lead Carnival into reaching a similar arrangement, despite having a different legal standing than RCCL.

RCCL agreed to return $21 million to any customers of its three brands that paid the fuel surcharge if they had booked the cruise before the surcharge was announced. Farley said the retroactive fuel surcharges for Carnival would total about $40 million.

Since the cruise lines announced the surcharges last November, oil prices have increased 13 percent, Farley noted.

She wrote that while the attorney general’s scrutiny means lines are “not in a practical position to revisit those levels,” the settlement affirmed the cruise lines’ right to charge a fuel surcharge going forward, with only the retroactive charges being disputed.