Bold Moves

LCT Magazine
Posted on July 11, 2008
FED UP WITH COSTLY OIL: If you click below, you will see a gutsy letter by airline executives to their customers about oil commodity speculation and its damage to their industry and the economy. It's about time top leaders in the limousine and chauffeured transportation industry did the same, whether on the subject of speculation, oil drilling (need more), damaging taxes and regulations on energy (need less), nuclear power plants to fuel alternative energy vehicles (need more of both),    the inhumanity and economic suffocation caused by the ethanol industry (get rid of it), or some other aspect of the oil/energy crisis.

This industry collectively must communicate with its customers, to not only ensure accurate understandings of the situations, but to build momentum and demand for rational, viable solutions. -- M.R.

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.


  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.
       

SOS

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