Carnival Corporation's chief executive, Ann Sherry, warned yesterday, that the US cruise giant will rethink its Australian operations if it is not allowed to get access to Sydney Harbour port facilities.
The Florida-based line, billed as the world's biggest cruise company, had anticipated a report released yesterday would allow its mega-liners to dock at the navy headquarters at Sydney's Garden Island, given there are no other feasible docking facilities for ships of this size on the harbour.
But the review, by former Defence Department secretary Allan Hawke, found that balancing the needs of the navy with visiting cruise ships was "essentially incompatible".
"Defence's long-term national security task should not be surrendered to the seasonal commercial requirements of the cruise ship industry," Dr Hawke's report said.
Instead of Garden Island, the review suggested international cruise ships could dock at Port Botany, at the Overseas Passenger Terminal at Circular Quay, Athol Bay in the harbour or anchor at sea with passengers tendered to shore -- all scenarios that were immediately rejected by Carnival.
"The Overseas Passenger Terminal is already at capacity, and the need for a permanent shared solution at Garden Island is now critical," Ms Sherry said.
Passengers spent nearly $1 billion on cruises in 2010-11, and this is expected to grow to $2.6bn by 2020, according to a Deloitte Access Economics report commissioned by Carnival, operator of P&O, Cunard and Princess Cruises.
The local cruising industry has grown by an average 18 per cent a year over the past five years, outstripping the pace of global cruising, which has grown by 5 per cent a year over that time.
"Obviously the long-term consequence of not having arrangements for passengers to disembark or having alternatives that are very expensive is that we will have to rethink the number of ships that end up coming to Australia," Ms Sherry said in an interview with The Australian.
"We are not at that point yet. I am not giving up."
Ms Sherry is seeking an immediate meeting with Defence Minister Stephen Smith, who commissioned the report.
"It feels as if we have not moved forward in two years," she said, "even though we anticipated this review would give us much more clarity."
Although rival cruise operator Royal Caribbean said yesterday that Port Botany should be considered as a docking point, Ms Sherry said it was not an ideal passenger experience.
Royal Caribbean's Australian boss, Gavin Smith, said: "If such a berthing opportunity was available we would use it for all of our ships. This would free up over 50 days per cruise season at the Overseas Passenger Terminal."
But Ms Sherry said Port Botany was "an incredibly congested, hard-working industrial environment".
"We know from our own research that the great experience for cruise passengers is coming through the Sydney Heads," she said.
Carnival is also having difficulty in Brisbane, where the lack of port facilities means passengers paying thousands of dollars for leisure cruises are forced to disembark at the city's grain terminals.