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An Open Letter to All Airline Customers
Our country is facing a possible sharp economic downturn because of skyrocketing
oil and fuel prices, but by pulling together, we can all do something to help now. For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers. Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation. Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs. Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper. The nation needs to pull together to reform the oil markets and solve this growing problem. We need your help. Get more information and contact Congress by visiting www.StopOilSpeculationNow.com/sos. Sincerely, Robert Fornaro Chairman, President and CEO AirTran Airways, Inc. Bill Ayer Chairman, President and CEO Alaska Airlines, Inc. Gerard J. Arpey Chairman, President and CEO American Airlines, Inc. Lawrence W. Kellner Chairman and CEO Continental Airlines, Inc. Richard Anderson CEO Delta Air Lines, Inc. Mark B. Dunkerley President and CEO Hawaiian Airlines, Inc. Dave Barger CEO JetBlue Airways Corporation Timothy E. Hoeksema Chairman, President and CEO Midwest Airlines Douglas M. Steenland President and CEO Northwest Airlines, Inc. Gary Kelly Chairman and CEO Southwest Airlines Co. Glenn F. Tilton Chairman, President and CEO United Airlines, Inc. Douglas Parker Chairman and CEO US Airways Group, Inc. |
The new home of this thread is now the TravelBuzz! forum, where FlyerTalk members who are members of the frequent flier programs of other airlines can participate in this discussion.
Why limit this to Delta forum FlyerTalk members only? Thank you in advance for your understanding. Regards, Canarsie Co-Moderator, Delta forum |
Wirelessly posted (Mozilla/4.0 (compatible; MSIE 4.01; Windows CE; PPC; 240x320))
Got it via FL. Haven't seen it from DL yet. Went direct to the website and sent the emails. Gave them mine, too. Hope it helps. |
Why not help spread the word about this effort?
Originally Posted by Canarsie
(Post 10008665)
The new home of this thread is now the TravelBuzz! forum, where FlyerTalk members who are members of the frequent flier programs of other airlines can participate in this discussion.
Why limit this to Delta forum FlyerTalk members only? Thank you in advance for your understanding. Regards, Canarsie Co-Moderator, Delta forum Why not attach a sticky to each of the airline forums referencing this thread and put the website in the sticky as well for quick access? I know some folks will insist that it is not the fault of the speculators but the similarities to the commodities speculation of an earlier time are very disturbing IMHO |
A little Econ 101 for all of you who think that the current oil prices are not being driven by supply and demand. :)
http://krugman.blogs.nytimes.com/200...d-speculation/ |
Originally Posted by JPat
(Post 10008736)
Why not attach a sticky to each of the airline forums referencing this thread and put the website in the sticky as well for quick access?
If so, I would consider taking action on this one... |
We control the oil markets. If Americans changed their consumption patterns so demand dropped significantly, the speculators would dry up overnight. To think otherwise is to indulge in conspiracy theories that shift blame and responsibility from the guy or gal in the mirror.
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Originally Posted by Canarsie
(Post 10008778)
Would a FlyerTalk-wide announcement suffice, in your opinion?
If so, I would consider taking action on this one... |
Received message from Hawaiian but not the other airlines yet; already sent my email letters off & referrals to friends & family.
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Originally Posted by Canarsie
(Post 10008778)
Would a FlyerTalk-wide announcement suffice, in your opinion?
If so, I would consider taking action on this one... I tweaked my letter by deleting the exploration part and added a sixth bullet about raising the deposit needed to control a commodities contract. I believe it is only 5% currently. I also tweaked a bit further to include commodities generally since they are universally all up considerably. |
A simple understanding of currency valuation on an international scale can tell you that the speculation of oil is only partly (and less than a significant part at that) responsible for the increased oil prices.
The downward spiral of the value of the dollar with respect to the currency in the countries where oil is produced is CHIEFLY responsible for the skyrocketing price of oil. |
The Economist has an intersting lead article on oil speculation:
http://www.economist.com/opinion/dis...ry_id=11670357 Also interesting to see that most of these airline CEOs are playing the hedging (or speculation) game heavily. |
Originally Posted by BearX220
(Post 10008783)
We control the oil markets. If Americans changed their consumption patterns so demand dropped significantly, the speculators would dry up overnight. To think otherwise is to indulge in conspiracy theories that shift blame and responsibility from the guy or gal in the mirror.
http://www.nationmaster.com/graph/en...il-consumption |
Speculators exist to help guarantee fuel supplies at a locked-in price. You know, what the airlines are doing...
And why did the evil speculators keep oil so low during the 1990s? And of course it's the speculators. Increasing demand from China and India, inflation, the Iran threat, and limits on domestic drilling have absolutely nothing to do with it. :rolleyes: Another good article: http://online.wsj.com/article/SB1215...w_and_outlooks :td: :td: :td: :td: :td: Also, I just noticed this was posted on "The Gate." Is it really the place for FT to tell us what bills to support? |
Even if speculation didn't exist, the fact remains that oil is a finite resource that will run out - Not tomorrow, not next week, not next year, but eventually... And as the likes of China and India come online with more cars and industry, 'eventually' will come sooner than we expected.
So trying to stop speculation merely delays the inevitable. |
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