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AN OPEN LETTER TO ALL AIRLINE CUSTOMERS From 12 Airline CEOs.

  2. dbeckmann
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I just received this...

AN OPEN LETTER
TO ALL AIRLINE CUSTOMERS
From 12 Airline CEOs.
Hello Mr. Beckmann,


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.


Richard Anderson Gerard J. Arpey

Richard Anderson
CEO
Delta Air Lines, Inc.


Gerard J. Arpey
Chairman, President and CEO
American Airlines, Inc.

Bill Ayer Dave Barger

Bill Ayer
Chairman, President and CEO
Alaska Airlines, Inc.


Dave Barger
CEO
JetBlue Airways Corporation

Mark B. Dunkerley Robert Fornaro

Mark B. Dunkerley
President and CEO
Hawaiian Airlines, Inc.


Robert Fornaro
Chairman, President and CEO
AirTran Airways

Timothy E. Hoeksema Lawrence W. Kellner

Timothy E. Hoeksema
Chairman, President and CEO
Midwest Airlines


Lawrence W. Kellner
Chairman and CEO
Continental Airlines, Inc.

Gary Kelly Douglas Parker

Gary Kelly
Chairman and CEO
Southwest Airlines Co.


Douglas Parker
Chairman and CEO
US Airways Group, Inc.

Douglas M. Steenland Glenn F. Tilton

Douglas M. Steenland
President and CEO
Northwest Airlines, Inc.


Glenn F. Tilton
Chairman, President and CEO
United Airlines, Inc.
dbeckmann

16 responses // AN OPEN LETTER TO ALL AIRLINE CUSTOMERS From 12 Airline CEOs.

  • geesh. I reckon should hurry up and use my frequent flyer miles...
    leahl
  • It's dollar devaluation mostly, not just speculation.
    maasanova
  • The capitalist economic system works properly, only when the rules are fair and followed by all. Thank you for sharing.
    mjsmith11
    1 response to this
  • It feels kind of refreshing to know that the people flying planes have the same sort of sinking feeling when they fuel up there rides and watch their money go *poof*; as when I fuel up my car and watch my money go *poof*.
    M_Pavlov
  • @massanova.... it's both, not just one... yes, devaluation is a MAJOR contributor, but the speculators outside the US have MUCH MORE lenient rules to follow, and can buy contracts something like 3-5 times cheaper than US speculators can... they don't have to put up ANYWHERE NEAR as much cash to buy a contract.

    same thing led to the Crash of '29... low margin requirements and incredible amounts of speculation which resulted...


    one funny thing which occurred to me the other day... with T. Boone Pickens making a big splash about wind power and the like, has anyone checked to see if he recently bought a lot of "put" options on oil futures? he's big enough to put a "short squeeze" on oil speculators by just threatening to take them out of the market with his wind farms, and then make money on the drop in crude prices....


    sorry, it's just the way my brain works, plus a good bet that Faux News or CNBC won't be thinking along those lines... :))))))))))))))))))))))))))))))))))))))
    plusaf
  • aw, poor airlines...

    Actually, if this is true, the speculators are doing the world a favor by jacking up oil prices. People need to stop burning oil and dumping carbon into the atmosphere, and it seems like perhaps only by not being able to afford it will people do that.
    steev
  • beckmann, u wanna draft up an open letter to all airline CEOs telling them that if they commit to investing in and using their weight to advocate for alternative energy research and legislation, they will wind up richer and alive for longer?
    regina
  • Here is a response from BARBARA BOXER about what she's been doing about oil prices:

    Dear Mr. Beckmann:



    Thank you for contacting me regarding high gasoline prices. I appreciate the opportunity to hear your views on this important issue, and I share your concerns.



    Gasoline prices reached an all-time high this year, and costs for food and other basic necessities are rising drastically. As millions of Americans struggle under this increasing burden, oil companies continue to report massive, record-breaking profits - $123 billion last year alone. This is unacceptable, and I want to assure you that I am working hard to lower prices and protect Americans from price gouging.



    I am proud to be an original co-sponsor of S.3044, the Consumer-First Energy Act of 2008. This important bill would impose a windfall profits tax on oil companies to discourage price gouging and to help consumers offset the high costs of energy products, punish any country or company colluding in setting the price of oil, and limit excessive speculation in oil markets.



    S.3044 also includes a provision that is similar to legislation I authored that would require the Federal Trade Commission to investigate possible manipulation of gasoline prices any time prices rise rapidly.



    Unfortunately, on June 10, 2008, the Senate minority blocked further consideration of S.3044. At a time when so many Americans are struggling to make ends meet and having to make the impossible choice between buying food for their families and filling up the gas tank, I am deeply disturbed that some of my colleagues prevented this important bill from moving forward.


    Opening up drilling in the United States is not the best way to achieve lower gas prices. For example, drilling in the Arctic National Wildlife Refuge (ANWR) would provide us with six months of oil at most, and at great cost. Furthermore, it would be more than a decade before we saw any of that oil. Ultimately, we need to move away from our dependence on oil and gasoline by developing renewable and efficient energy technologies. Right now, we need to go after the big oil companies that are holding Americans hostage with their exorbitantly high prices.



    Americans deserve better than oil companies that gouge consumers in order to make huge profits, and Congress needs to take action to help alleviate this crisis. Rest assured, I will continue working for the passage of S.3044, and I will keep fighting to help Americans enjoy fair and reasonable energy prices.



    Again, thank you for writing to me. Please do not hesitate to contact me in the future on this or other issues that concern you.

    Barbara Boxer
    United States Senator

    Please visit my website at http://boxer.senate.gov
    dbeckmann
    1 response to this
  • I don’t agree with the proposal in the open letter asking for government intervention of the market. Speculators trade based upon the anticipated value of a commodity driven by supply and demand. India and China’s current and more importantly projected consumption of oil in addition to the weak US dollar and limited supply drives up trading.

    The airlines are asking the federal government to regulate speculators is like asking them to limit the value Microsoft or GE shares can trade. As always the airlines continue to think short term. This is why they are in trouble. The correct answer which the airlines should support is for the US to adopt a balanced energy strategy recognizing we are competing with other countries for a limited supply of oil. The correct energy strategy would include opening AWAR and coastal regions to drilling (with effective environmental controls), build more refineries, invest in research to burn coal more cleanly, build nuclear power plants, and finally consider other forms of energy production such as wind and solar.

    With limited regulation the markets will adapt. The environmentalists have prevented the US from sourcing huge supplies of nuclear, oil, and coal resources. We need a President and Congress who will support this balanced energy strategy. Unfortunately it appears we may get a President who will just add more regulation.
    chuckpar
  • gotta let HawkManG hear about this one...

    thanks for YOUR replies, guys,....

    imnsho, she's got the economics-IQ of a soft-boiled egg.

    while her ideas are appealing to too many americans on a gut level, they're so incredibly stupid from an experiential and economic point of view that they're beyond laughable.

    as you've pointed out, if we put a tax on "excess profits" of oil companies, they have to make up the money SOMEWHERE... and the ONLY somewhere that the money comes from is their CUSTOMERS, a concept she seems to be incapable of fitting into her mind.

    and as mjsmith so well put it, i agree: they blather about "excess profits" but are intellectually or morally incapable of specifying what those levels are or how they figured out where "excessive" starts.

    some day some psychology major will get a PhD and a Nobel Prize for figuring that mystery out!
    plusaf
    1 response to this
  • oh, this is great... google "s.3044" and READ some of the description...

    "No Oil Producing and Exporting Cartels Act of 2008 or NOPEC - Amends the Sherman Act to make it illegal for any foreign state to act with another foreign state to: (1) limit the production or distribution of oil, natural gas, or any other petroleum product; (2) set or maintain prices for such products; or (3) otherwise take any action in restraint of trade for such products. Denies sovereign immunity or act of state doctrine protections for foreign states who engage in such such illegal conduct. "

    where in living HELL are they going to prosecute THAT legal challenge.... same place the unions tried to sue Saudi Arabia for job losses after the oil shortages of 1973??????

    OMFG! fracking MORONS!
    plusaf
    1 response to this
  • @Hawkmang... "A bit of a tangent, but I wonder if these officials give any thought to the fact that foreign states have been and are propping up our topsy-turvy economy?"

    not a tangent at all... our bumblement "officials" seem to have no fracking concept of economics and how things "really work" in that area!

    like some years ago when i was in CA arguing FOR NAFTA. tons of anti-arguments.

    gotta have jobs here... can't keep shipping jobs over there.... need to be self-sufficient.

    rubbish.

    one of my favorite logical propositions was to say that if NAFTA or any other international trade agreement is a bad idea, then why don't we have similar trade agreements between the States of the USA?

    [no answer.]

    and for the "buy local" crowd, i kept pointing out that i'd REALLY LIKE to buy a Ford, but the ONLY CAR DEALER in our city at the time was a CHEVY dealer.

    so i should buy a Chevy because it supports the Local Economy??????

    they don't get the point of reducto ad absurdum at all, but maybe that's their own genetic defect, eh?

    :)))))))))))))))))
    plusaf

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