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Costa CEO Foschi pins Concordia disaster on captain's error

Foschi - Capt. Schettino deviated from approved course
Costa Crociere chairman and ceo Pier Luigi Foschi today insisted that the deadly capsizing of the Costa Concordia off the Italian coast on Friday night was attributable to ‘human error’ by Capt. Francesco Schettino in deviating from a pre-fixed course. By contrast, he insisted that the company’s safety procedures were state-of-the-art, that ‘every member of the crew behaved heroically’ in evacuating the passengers from the ship, and that there was no evidence thus far of systemic failure in the company’s recruitment and training policies or its operating procedures.

Appearing with company president Gianni Onorato at a crowded press conference at the company’s Genoa headquarters, Foschi declined to speculate on the precise events of Friday night, noting that Costa had not been able to review the contents of the ship’s ‘black box,’ which has been impounded by investigators into the casualty.

He said the company will give all possible assistance to its captain, a fully trained and certified commander who had joined Costa as security officer in 2002 and graduated to captain in 2006.

At the same time, Foschi said ‘we have a duty to recognise the facts and we cannot associate ourselves with the human error identified with this tragedy. He took a decision that is against our written rules for the behaviour of captains on board’ by deviating from the vessel’s prescribed course.

Foschi said the company’s ships follow a route past the island of Giglio more than 100 times a year and claimed that only once had a ship sailed close to the island, in August last year for the feast of San Lorenzo and that the Coast Guard had been made aware of the diversion. He added that the route is pre-fixed by computer and that if a ship deviates or delays on its route an alarm will go off.

At the same time, when it came to the captain’s behaviour after the initial collision with the rocks off Giglio, Foschi contended that ‘according to very reliable internal sources, there is no indication that he did not act as he should have.’

He added that it is his belief that Schettino stayed aboard the listing ship ‘for a long time’ after the accident. Indeed, in moving the ship close to shore before grounding it, he may have saved many lives.

Schettino is now in custody and under investigation for manslaughter,  shipwreck and abandoning ship following an incident that has resulted in six confirmed deaths thus far and up to 15 unaccounted for. Foschi said crew and passengers are among those missing, but deferred to authorities on numbers.

The rescue operation was called off on Monday morning after Costa Concordia, resting in relatively shallow waters off the island, moved a few centimetres towards a much deeper area as sea conditions worsened.

The fear remains that  the vessel may start to leak oil into the water: Foschi confirmed that it was carrying  around 2,300 tonnes of heavy fuel oil in 17 double-hull compartments. Four more tanks were loaded with gasoil.

Foschi said salvage giant Smit is currently assessing the state of the ship and analysing the options; he anticipated that Smit would seek to seal the gash in  Concordia’s hull before righting it and towing it to a nearby port for assessment.

The financial impact on Costa, and on the industry as a whole, is likely to be severe. Carnival’s share price plunged in off-market trading on the New York Stock Exchange during the Martin Luther King Jr. Day observance before recovering somewhat, a consequence of the disaster that Foschi described as expected.

Costa has already put the cost of the ship being out of service at $93m. Apart from the cost of salvaging or replacing the vessel—and insurer sources in London suggest that it will be the most expensive hull claim ever—the company will expect a wave of lawsuits from passengers.

The longer-term consequences of the disaster are considerably harder to assess. It could not have come at a worse time, with the critical first quarter booking period now under way and consumers already battening down the hatches for a tough 2012. In Italy, a key source market, and elsewhere the images of the stricken ship and desperate survivors are likely to hit demand.

Costa’s training and recruitment processes, as well as its operating procedures, will certainly come in for scrutiny after what appears to have been a series of human errors by its captain. Separately, Italian environment minister Corrado Clini has called for a reassessment of cruise ships accessing sensitive sea areas, including Venice’s lagoon.

More generally, questions are also being raised about the cost-cutting that has been a prominent feature of the industry’s response to the financial crisis and that some industry observers are already linking to the accident. In Monday’s press conference, Foschi strongly denied that the company would ever cut costs on safety, quality or the environment. He added that he was convinced that the company, and the industry, would bounce back from the Costa Concordia disaster.