APRIL 17, 2017 — Carnival Cruise Lines says it is investing more than $300 million in upgrades as result of the operational review that parent Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) put in place after the Carnival Triumph fire in February 2013. The overall program of enhancements across the corporation's 101-ship fleet, including Carnival Cruise Lines' 24 cruise ships, is expected to cost between $600 and $700 million.

The program announced today will enhance emergency power capabilities, introduce new fire safety technology, and improve the level of operating redundancies across the entire  Carnival Cruises fleet.

Carnival Cruise Lines President and CEO Gerry Cahill

The cruise line says some upgrades have already begun. It says the steps it is taking will expand the availability of hotel services for the comfort of guests in the rare instance of a shipboard event that involves the loss of main power. In addition, the plan will reinforce key shipboard operating systems to further prevent a potential loss of primary power.

"All of Carnival Cruise Lines' ships operate safely today," said Gerry Cahill, president and CEO of Carnival Cruise Lines. "Each vessel already has effective systems in place to prevent, detect and respond to emergency situations, and we meet or exceed all regulatory requirements."

"However, by applying lessons learned through our fleet-wide operational review after the Carnival Triumph fire and by taking advantage of new technologies, we have identified areas for enhancement across our operations," he continued. "These initiatives reflect our commitment to safe and reliable operations and an enjoyable cruising experience for the nearly 4.5 million guests who sail with Carnival Cruise Lines each year."

Increased Emergency Generator Power

The initial increase in emergency generator power across Carnival Cruise Lines' fleet of 24 ships will be completed over the next several months. An additional emergency generator will be installed on each vessel to provide for 100 percent of stateroom and public toilets, fresh water and elevators in the event of a loss of main power.

The work is already underway and will not affect scheduled itineraries. On completion of the initial phase, the cruise line will install a second permanent back-up power system on each ship to provide an even greater level of hotel and guest services if main power is lost. These additional services will include expanded cooking facilities and cold food storage, as well as internet and telephone communications.

"Although every ship in our fleet currently has emergency back-up power which is designed to enable the continuous operation of safety equipment and some hotel services, it is our intent to significantly bolster that back-up power to support the core hotel services. With this improvement, we will better ensure guest comfort in the rare instance of a loss of main power," said Mr. Cahill.

Increased Fire Prevention, Detection and Suppression Systems

The company will also make additional investments in the newest and most technically advanced fire prevention, detection and suppression systems. This includes upgrading the existing water mist fire suppression systems already in place on Carnival vessels to the newest generation. When triggered, this high-pressure water mist system instantly creates a larger and thicker blanket of water droplets than the present system. As the water droplets evaporate, the system also rapidly cools any hot areas to prevent the possibility of a fire restarting.

"On Carnival Triumph, our fire systems were effective and our teams performed well in controlling and extinguishing the fire. However, we want to take advantage of the latest and most-advanced generation of fire safety systems to enhance the current extensive capabilities across our fleet," added Mr. Cahill.

Enhanced Operating Redundancies

All of Carnival Cruise Lines ships have two separate, redundant engine rooms. The company's operational review has identified modifications to further decrease the likelihood of losing propulsion or primary power, as happened on Carnival Triumph in February. The modifications will include a reconfiguration of certain engine-related electrical components. On ships where these enhancements will be made, the design and fabrication of specialized components will require longer lead times for completion, in contrast to the immediate upgrades to back-up emergency power and other systems.

Last month, Carnival Cruise Lines announced results from the first phase of the company's operational review, specifically addressing Carnival Triumph and Carnival Sunshine, both of which are currently out of service. The plan for each of these ships addresses each of the three areas outlined above.

Company to Form New Safety & Reliability Review Board

Carnival Cruise Lines also announced the formation of a Safety & Reliability Review Board comprised of outside experts with significant expertise in marine and occupational safety, reliability and maintenance, marine regulatory compliance and quality control/assurance. The company already receives oversight and input from outside regulatory authorities and industry experts. The new Review Board will provide an additional, independent third-party perspective, drawing from deep experience across a number of relevant fields and organizations.

The Review Board will be comprised of five external members. Active searches are underway for candidates with previous experience in organizations such as the U.S. Navy, U.S. Coast Guard, and National Transportation Safety Board, as well as leading airlines and equipment manufacturers.

"The formation of our Safety & Reliability Review Board is an integral part of how Carnival Cruise Lines will drive continuous improvement across our fleet. We will be responsive to its recommendations," said Mr. Cahill.

Carnival Corporation & plc Fleet Enhancements

Parent company Carnival Corporation & plc previously announced a corporate-wide operational review of all 10 of its brands and 101 ships. The review process will include learnings from the recent incidents that can be applied across the corporation's fleet. Carnival Corporation & plc has confirmed that, based on the results of the ongoing review, the latest versions of technologies and enhancements will also be implemented on the remainder of the fleet where they are not already present. The overall program of enhancements across the corporation's 101-ship fleet, including Carnival Cruise Lines' ships, is expected to cost between $600 and $700 million.

"Our fleet already operates at a high standard of reliability. The investments announced today for Carnival Cruise Lines, and those we will continue to make, will reinforce our ability to consistently deliver the customer experience that 10 million people every year have come to expect from us across our fleet of 101 ships. Absolutely nothing is more important than the safety and comfort of our guests and crew, and we will use the full resources of our company to meet that commitment," said Micky Arison, Chairman and CEO of Carnival Corporation & plc.

Initial implementation of the upgrades to the Carnival Corporation & plc fleet will take place during the next several months. Each class of ship is different and often systems differ on ships within a class, so the enhancements will be tailored to each vessel. All findings from the operational review will be shared with Cruise Lines International Association (CLIA) as part of the industry-wide operational review announced in March.