WASHINGTON -- A Federal Maritime Commission plan to boost bonding
requirements for cruise lines would create a paperwork burden and
slow the growth of the cruise business, according to written
comments filed at the FMC by operators and agents.
Some industry members also will get a chance to make their case
in person at a public hearing Wednesday.
At issue is an FMC plan to eliminate the $15 million ceiling on
cruise line bond requirements and make other changes in the
financial responsibility rules.
Under existing regulations, cruise lines with ships embarking
from U.S. ports are required to post a bond or other surety to
protect passengers against nonperformance.
The $15 million cap came under review after several high-profile
cruise line bankruptcies, including those of American Classic
Voyages, which was self-insured, and Premier Cruises.
Under the new proposal, cruise lines would be responsible for
coverage equal to the total amount of passenger funds on hand for
future cruises (unearned passenger revenue), except for revenue
received from credit card charges made within 60 days of
But in comments submitted to the FMC, agents and cruise lines
said the risk of large operators ceasing operations is slim and
doesn't justify lifting the ceiling entirely.
In its comments, Carnival Corp. said the FMC's proposed formula
for calculating the unearned passenger revenue was overly
Carnival suggested raising the bond ceiling to $50 million for
single-brand operators and $100 million for multibrand operators,
which could file a single bond instead of, in Carnival's case, six
Carnival also suggested changing the law to extend surety
requirements to cruises booked in the U.S. but embarked from
The National Association of Cruise Oriented Agencies said major
cruise lines, most of which are publicly owned and subject to
financial disclosure, likely would continue to operate throughout a
ASTA submitted a terse note that suggested the FMC's future
bonding requirements be calculated on a company's number of berths
instead of the current blanket ceiling or as a percentage of
Visa, meanwhile, said the proposal to exempt credit card
purchases made within 60 days from the required coverage would
unfairly shift the financial responsibility from cruise operations
to card issuers.
Cruise lines cool to FMC dispute resolution
WASHINGTON -- Cruise line comments to the Federal Maritime
Commission included a variety of opinions about the bond ceiling,
but the lines were uniformly opposed to a related plan that could
get the FMC involved in resolving disputes between passengers and
Under the plan, cruise lines operating from U.S. ports would be
required to agree to the FMC's alternative dispute-resolution
process, where passengers could submit claims against the cruise
lines for nonperformance.
The dispute-resolution process could include binding arbitration
on claims not resolved between the operator and the passenger
within six months. Currently, relationships between the lines and
their customers are governed by the terms in the passenger ticket
contracts, and the FMC said it has "limited jurisdiction" over
Attorneys for Norwegian Cruise Line said the proposed rule would
"give passengers the right to bring the cruise company to
Washington to resolve anything the passenger views as
nonperformance, from cold soup to surly waiters to missed
Carnival Corp. added that the program, if adopted, should be
limited to refunds sought for canceled cruises resulting from
bankruptcy or a cessation of business. -- R.T.