Carnival to refund passengers $40 million

/ Source: The Associated Press

Carnival Corp., the world's largest cruise operator, said Monday it would give $40 million in refunds to customers nationwide who were assessed a fuel surcharge after they booked their trips.

It's the second cruise company to reach an agreement with the Florida Attorney General's Office, which received more than 300 complaints about fees added by several cruise operators last fall.

Customers said the charge was tacked on after they made their reservation.

The Carnival settlement affects more than 1.1 million bookings — the number of people affected was not immediately available.

Carnival is the parent company of Carnival Cruise Lines, Costa Cruises, Cunard Line, Holland America Line, Princess Cruises and The Yachts of Seabourn.

It and Royal Caribbean Cruises Ltd., another industry leader, announced in November they would start billing passengers to offset rising fuel prices — $5 per person, per day — for voyages beginning Feb. 1.

After the attorney general launched its investigation, Royal Caribbean announced in early March it would refund eligible customers about $21 million.

Carnival said it will contact customers who booked trips before the fuel surcharge was announced on Nov. 7. People who traveled on or before April 4 will receive a refund in whatever payment form they used for the booking. Those on trips departing April 5 to June 23 are to receive an on-board credit. For trips after that, customers' bookings will be adjusted to remove the surcharge.

Last week, Carnival reported a 17 percent drop in first-quarter profits due to rising fuel costs, a drag on operations that also led the company to lower full-year profit guidance. Carnival said the settlement will not affect these numbers because the company did not recognize the fuel supplement revenue while the attorney general's office was conducting its review.

Both cruise lines also agreed to clearly disclose the charges in the future in advertisements and while reservations are being made.