The chief executive officers of twelve U.S. airlines have decided to take a stand against oil speculation and launched a major campaign to stop it. With oil pushing new records over and over again, airlines are feeling the bite in their bottom line and have laid off employees, raised fair prices and added additional fees to flight changes and extra luggage. The airlines are now pleading with their customers to help them.
All of the airlines involved sent a co-signed letter to all of their frequent flier customers asking them to get involved and contact Congress to pass a bill to curb the oil speculation that is going on. The airlines state they believe that an additional $30 - $60 a barrel is added to the current price due to speculation and that a bill could remove that surplus.
In addition to the co-signed letter the airlines also used their newly founded organization, Stop Oil Speculation Now to fund a major national ad campaign putting a full page ad in publications such as The Wall Street Journal, The Hill, Roll Call and Politico. The ad asks the following questions: Drive to work? Buy food? Take the kids to see grandma each summer? Plan on heating your home this winter? The ad then states, “If you do any of these things, gas and oil speculation hurts you and your family.” Readers are then directed to go to the organizations website at StopOilSpeculationNow.com to ask Congress to make a difference in 30 days.
You can view a copy of the letter at the Airline Organizations website here or you can read the text version below.
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
What do you think about the airlines ad campaign and letter to all of their customers? Do you feel that Congress can truly change the price of oil by approving a bill to remove speculators? Many economists and oil market analysts say that if the speculators are driven from the speculation market in the U.S. they will just go to other corners of the world to continue their speculative trading. Tell us what you think!
So the airlines don’t want to allow passengers any rights because it would interfere with the free market and their ability to compete? But as hypocritical as they are it’s ok to interfere with the Free Market when it benefits them.
We all want the cost of fuel to go down. Everyone of us is feeling the pinch. But this is another form of Bailout for the airlines and Congress better make sure that if they allow this bailout they allow passengers to have basic human rights on airplanes.
Kate