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Old February 18th, 2001, 06:36 PM
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Default Larry Pimentel, Cunard and Seabourn CEO resigns

This was published on Miami Herald:

President of Carnival Corp.'s Luxury Cruise Lines Resigns

Philosophical differences and operational concerns at Cunard Line --
which encompasses Carnival Corp.'s luxury brands Cunard and Seabourn --may have contributed to this week's sudden resignation of company president Larry Pimentel.

Pimentel, who had been with Cunard since 1998, when the line was bought by Carnival, cited personal reasons Tuesday for his decision to step down. His wife died last year, and he said he wanted to spend more time with his 16-year-old son and 14-year-old daughter.

Pimentel, whose expertise is in marketing, was replaced by Cunard chief operating officer Pam Conover, who comes from a financial background.

Wall Street analysts who track the cruise industry point to
philosophical differences between Pimentel and Carnival, among other problems.

In announcing the company's earnings in December, Carnival chief
operating officer Howard Frank said the Miami company's Seabourn line was "struggling more than we expected it would" from a pricing standpoint.

The situation has changed little in the new year. On Wednesday during a mid-quarter conference call with analysts, Carnival executives said there is continued weakness in the luxury market, which makes up 9 percent of Carnival's capacity.

"The luxury end of the market doesn't expand as quickly as the mass market," said Gerald Cahill, Carnival's chief financial officer."Pricing has been difficult to achieve."

The luxury cruise market in general -- which has seen a strong increase in capacity in recent years -- is facing increased competition and increased discounting, necessary to lure passengers.

"In terms of profitability, luxury cruise lines are a more challenging strata to operate in," said James Winchester, an analyst with Lazard Freres in New York. "There is no doubt Cunard has been a tough ship to turn around. There were difficulties integrating the brands [Cunard and Seabourn] and getting things brought into the 21st Century has been a challenge."

Others point to "ideological" differences between Pimentel, an industry veteran, and Carnival. Pimentel was not in favor of discounting luxury cruise prices, a practice favored by Carnival.

"This was inconsistent with Larry's views," said Scott Barry, analyst with Credit Suisse First Boston.

Carnival spokesman Tim Gallagher reiterated Wednesday that Pimentel's resignation was "totally his decision." The Herald was unable to reach Pimentel, whose resignation was effective immediately.


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