The chief executives of a dozen U.S. airlines, beset by record fuel costs that have resulted in layoffs, cuts in capacity and increased fees for passengers, are now asking the flying public to help fight the price of oil.
The CEOs have signed a letter being sent to frequent fliers of their carriers. It asks them to contact members of Congress about the problem of market speculation, which the executives believe is driving up the price of crude.
“This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers,” the letter states.
Lawmakers have cited the problems high fuel prices cause airlines, trucking companies, farmers and consumers in calling for restrictions on speculative trading.
Northwest Airlines Corp. Chief Executive Douglas Steenland urged lawmakers in June to close loopholes that allow traders to dodge U.S. speculation limits by trading on foreign exchanges or through over-the-counter transactions.
“Our highest priority is to tackle the overall price of fuel which is now 40% of our cost pie,” Steenland told lawmakers. “Addressing excessive speculation is the most immediate remedy Congress could deliver.”
The letter from the airlines acknowledges that oil prices are partly a response to normal market forces.
“However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation,” the letter says.
The letter says speculators buy up large amounts of oil and then sell it to each other again and again. The price goes up with each trade and consumers pick up the final tab.
It is signed by the CEOs of Northwest, AirTran Airways, Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, Midwest Airlines, Southwest Airlines, United Airlines and US Airways.