This Arrived in my mail this morning...

[daveon]

It's an interesting document, especially the 2nd to last paragraph...

An open letter to all airline customers

 

============================================================

 

Dear David Oneill,

 

Last week, crude oil hit an all-time high of $146, and the skyrocketing cost of fuel is impacting our customers, our employees, the communities we serve, and the economy as a whole. United, and the majority of other major U.S.

airlines, are asking our most loyal customers to join us in pushing for legislation to add more transparency and disclosure in the oil markets. Please see the attached open letter from the leaders of the U.S. airline industry.

 

------------------------------------------------------------

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 StopOilSpeculationNow.com.

http://www.unitedoffers.com/600-1sape/101395/235994/09249326b6a58ae4dddd19f302bf53ed

 

Robert Fornaro

Chairman, President and CEO

AirTran Airways

 

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.

Blogged with the Flock Browser

Comments

[purplecthulhu.livejournal.com]

Interesting indeed... I've heard arguments both ways that the current oil prices are due to underlying changes in the industry (peak oil etc.) or that they're due to speculation. Clearly the airlines think it's the latter, though there must be some component of the former as well.

I wonder if they'll say something about this on the plane when I fly to LAX tomorrow?

[major-clanger.livejournal.com]

It's not an either/or; the higher the underlying price (and indeed the higher the credible future prices) the more temptation there is for speculators.

[daveon.livejournal.com]

As I said earlier to somebody on this subject, I think the increases we saw last year were due to uncertainty in supply and fairly conventional factors. Which is why I suspected the days of $30 a barrel were long gone. Once we crashed through $100 and then raced to $120... well that's not structural supply/demand. That's people seeing what they can make.

I think we're going to hit $200 before this pops purely because traders will want to see if they can and they know that some people will get very rich because of it.

I suspect we could be back around $70(ish) by mid/end next year though.

[celestialweasel.livejournal.com]

Short everything!!!

[daveon.livejournal.com]

LAX? Where you going to be?

[purplecthulhu.livejournal.com]

I'm heading to Pasadena for a conference, but spending the weekend with friends in Oxnard.

You?