As a frequent flyer my husband received the following from Northwest Airlines. I urge you PLEASE click on the link below. It takes only a second of your time by putting in your zip code and emails will be sent to your Congressional Representatives. This affects ALL of us, not just those who travel by air.
This story airs tonight on NBC with Brian Williams.
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. Visit www.StopOilSpeculationNow.com.
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.
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.
I know that here in Canada we use to have a law that was called the combines act, just to stop companies from being able to defaud the people, I guess it has just gone by the way side now days….as of to-day gas is selling at $6.11 per US gallon and if the govenments does’t step in to stop this rise there will be many people finding it more expensive to get to work then they make as thousands of our manufacturing jobs have left for cheaper places the same as the US jobs have left. if it cost more to get to work why go, might as well sit back and go on welfare…….however it is to late for hubby & me as we are retired…….I was under the impression the govt. was on the side of the people not the big companies………Oh by the way we have a conservative federal govt. now…….how ever the Liberals are trying to bring them down I just hope that the Liberals do not get into power as they want to add another 50cents per liter of gas as well as our natural gas to heat our homes and our hydro all in the name of saving the planet from green house gas…..with out China over a million new cars there and india the same as with other developing countries if they do not step in to help our Country of 31 million would not even be noticed llllllljust taxed to death……
I just went to the website and sent the e-mail. Good post, Elaine. This is such a serious problem. I sincerely hope that congress will reinforce these limits.
I wonder if these sort of speculations will increase the fuel prices to $200 per barrel.
Mary Anne – 50 cents more on gas would be awful!
Janet – thanks! that website is trying to get the word out, hope it works and the American people get involved.
Sadly this is not how markets really work. Speculators don’t control markets, supply and demand do. If you eliminate speculation the results will not be that the price of oil will magically go down. Without speculators, markets would be much less efficient and sadly, big players could much more easily manipulate prices. It will just lead to situations wherein when demand and supply are at their extremes the extremes will be much worse.
Also speculation at times can lead to a positive effect on your daily price experience. Southwest Airlines bought an enormous amount of gas on the futures market some time ago at a low price. This allowed them to fix their long term costs and now has allowed them to be profitable in this difficult market and to offer lower fares than most of their competitors. Northwest of course had the same opportunity and now having failed to fix their costs wish to be bailed out of their bad business decision.