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An Open Letter to All Airline Customers

An Open Letter to All Airline Customers

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Old Jul 9, 08, 3:48 pm
  #1  
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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.
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Old Jul 9, 08, 4:05 pm
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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
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Old Jul 9, 08, 4:08 pm
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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.
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Old Jul 9, 08, 4:19 pm
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Angry Why not help spread the word about this effort?

Originally Posted by Canarsie View Post
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
Hawaiian Airlines has sent out to their e-mail list as well.

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
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Old Jul 9, 08, 4:19 pm
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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/
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Old Jul 9, 08, 4:30 pm
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Originally Posted by JPat View Post
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?
Would a FlyerTalk-wide announcement suffice, in your opinion?

If so, I would consider taking action on this one...
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Old Jul 9, 08, 4:32 pm
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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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Old Jul 9, 08, 4:33 pm
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Originally Posted by Canarsie View Post
Would a FlyerTalk-wide announcement suffice, in your opinion?

If so, I would consider taking action on this one...
I think that's a great idea
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Old Jul 9, 08, 4:34 pm
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Received message from Hawaiian but not the other airlines yet; already sent my email letters off & referrals to friends & family.
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Old Jul 9, 08, 4:37 pm
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Originally Posted by Canarsie View Post
Would a FlyerTalk-wide announcement suffice, in your opinion?

If so, I would consider taking action on this one...
Flier wide is good but encourage folks to read before they send it out. Not everyone is going to support the ANWR drilling bit they slipped in...
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.
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Old Jul 9, 08, 4:37 pm
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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.
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Old Jul 9, 08, 4:40 pm
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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.
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Old Jul 9, 08, 4:50 pm
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Originally Posted by BearX220 View Post
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.
I was sure you were wrong until I looked it up. Man, we're the leaders in consumption by far!

http://www.nationmaster.com/graph/en...il-consumption
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Old Jul 9, 08, 5:00 pm
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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.

Another good article: http://online.wsj.com/article/SB1215...w_and_outlooks



Also, I just noticed this was posted on "The Gate." Is it really the place for FT to tell us what bills to support?

Last edited by dwebb; Jul 9, 08 at 5:11 pm
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Old Jul 9, 08, 5:08 pm
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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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