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Open letter from the airline CEO's to flyers
My Friends,
I thought I would pass this along in honor of a new record day in commodities trading, $147 barrel oil. I received this open letter addressed to all airline costumers two days ago. I thought it might be of interest to some of you. I think these CEO’s may be suffering from “Mental Recession” also. They should make an appointment to see Dr. Phil Gramm, Chief of Economic Psychiatry and Euthanasia for the McCain Campaign.
The letter follows the signatories.
Richard Anderson
CEO
Delta Air Lines, Inc.
Gerard J. Arpey
Chairman, President and CEO
American Airlines, Inc.
Bill Ayer
Chairman, President and CEO
Alaska Airlines, Inc
Dave Barger
CEO
JetBlue Airways Corporation
Mark B. Dunkerley
President and CEO
Hawaiian Airlines, Inc
Robert Fornaro
Chairman, President and CEO
AirTran Airways
Timothy E. Hoeksema
Chairman, President and CEO
Midwest Airlines
Lawrence W. Kellner
Chairman and CEO
Continental Airlines, Inc.
Gary Kelly
Chairman and CEO
Southwest Airlines Co.
Douglas Parker
Chairman and CEO
US Airways Group, Inc.
Douglas M. Steenland
President and CEO
Northwest Airlines, Inc
Glenn F. Tilton
Chairman, President and CEO
United Airlines, Inc.
Hello Mr. -------,
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.
Comments (8)
And remember who we have to thank for this: Dr. Phil Gramm aka John McCain's Chief Economic Adviser and Co-Chairman of his campaign.
July 11, 2008 1:00 PM | Reply | Permalink
You better believe it.
McPuppet might as well bring back Paul Wolfowitz to develop his administration's Iraq policy. Nothing says trust me like a well rounded cadre of darkness.
July 11, 2008 1:20 PM | Reply | Permalink
BTW, McCain was also Philip "the marauder" Gramm's campaign co-chair in 1996 for his failed Presidential run. Its nice to return favors.
July 11, 2008 1:26 PM | Reply | Permalink
They covered this on the local news last night. I find it fascinating. No doubt speculation is contributing to price increases. But, this move on the part of the airline industry demonstrates a remarkable degree of desperation. Oil is going bye-bye. And there's little that our government can do to stop that in the long-term. The best that they can do is to plead for short-term relief to prolong the inevitable...the demise of the airline industry.
Has anyone else seen T. Boone Picken's ads airing locally about wind power as an alternate energy source? Wind power also got coverage last night on the CBS Evening News. It seems that the realities of oil dependency are beginning to see the light of day.
July 11, 2008 1:33 PM | Reply | Permalink
I've seen the Picken's ads but missed the coverage of the letter. What station/outlet was it?
July 11, 2008 1:39 PM | Reply | Permalink
I believe that it was the local CBS station in DC, www.wusa9.com, but I don't see a link to the story now on their website.
July 11, 2008 2:16 PM | Reply | Permalink
The 66% number is bogus.
Just last month, lawmakers asked the Commodity Futures Trading Commission to reclassify swaps dealers as speculators, even though they shop and buy oil futures directly for commercial hedgers like airlines. Without including these swaps dealers, the percentage of speculators was under 40%.
This is a manufactured issue.
July 11, 2008 2:25 PM | Reply | Permalink
I got this open letter already from one of the frequent flyer programs. It is one of the most pitiful displays of ineptitude and disingenuousness from corporate America in recent memory. For generations the world economy, with the US ahead of the pack, has been burning fossil fuels with reckless abandon. This is a consumption of (geological) capital that under basic accounting principles amounts to a form of going out of business. Now that the rate of pumping out of that nonrenewable capital has peaked, one of the industries most obviously at risk of having to start downsizing (if not yet going out of business) as a result is failing utterly to acknowledge this and instead is conjuring up conspiracy theories of speculators causing its difficulties. If there WERE actually a truly major speculative bubble in the oil market, these airlines would be in there speculating on the bursting, not whining like a pack of crybabies, begging for corporate welfare, and spinning myths about "speculative costs."
July 11, 2008 5:47 PM | Reply | Permalink
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