Thursday, July 10, 2008

An Open Letter to All Airline Customers:


Well, while I'm sure many of you have already received this, Northwest is running a little behind. This letter started hitting the web yesterday, but just arrived in my inbox this morning.

The airline transport associate (ATA) and many of the major airlines' CEO have composed a little letter to bring airline oil struggles to the forefront of the public's mind.

Obviously, oil is something that I have been closely monitoring. It seems that about 50% of economists believe that this is a speculation bubble as ATA suggests, and the other 50% are saying "Get used to it," and believe that supply and demand is the driving force behind the astronomical growth in crude oil futures.

As this letter indicates, whatever the case may be, it’s a scary economic time for airlines and Americans, alike.

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
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

Robert FornaroChairman, President and CEOAirTran Airways
Bill AyerChairman, President and CEOAlaska Airlines, Inc.
Gerard J. Arpey Chairman, President and CEOAmerican Airlines, Inc.
Lawrence W. KellnerChairman and CEOContinental Airlines, Inc.
Richard Anderson CEODelta Air Lines, Inc.
Mark B. DunkerleyPresident and CEOHawaiian Airlines, Inc.
Dave BargerCEOJetBlue Airways Corporation
Timothy E. HoeksemaChairman, President and CEOMidwest Airlines
Douglas M. SteenlandPresident and CEONorthwest Airlines, Inc.
Gary KellyChairman and CEOSouthwest Airlines Co.
Glenn F. TiltonChairman, President and CEOUnited Airlines, Inc.
Douglas ParkerChairman and CEOUS Airways Group, Inc.

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