TRAVEL NEWS & TIPS

Airline execs ask customers to stop high oil prices

A dozen sign a letter that blames speculators for price increases.

From the Associated Press
05:36 PM PDT, July 09, 2008

ATLANTA --The chief executives of a dozen U.S. airlines, beset by record fuel costs that have caused several to cut jobs and capacity and impose higher fees on customers, are now asking their customers to help curb the rise in oil prices.

They have co-signed a letter being sent to frequent fliers of their respective carriers, asking customers to contact Congress about the problem of market speculation, which they said is driving up the price of oil.

"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.

In calling for restrictions in speculative trading, lawmakers too have cited the problems the costly fuel causes for airlines, trucking companies, farmers and consumers.

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, prompting a need for the country 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," 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. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs, the letter says.

It adds that regulations established decades ago by Congress to control excessive market speculation have been weakened or removed over the years.

"We need your help," the letter to customers says. "Get more information and contact Congress."

It is signed by the CEOs of Northwest Airlines, AirTran Airways, Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, Midwest Airlines, Southwest Airlines, United Airlines and US Airways.

Kevin Healy, senior vice president of marketing and planning for AirTran Airways, a subsidiary of AirTran Holdings Inc., said in an interview that while airlines often band together to address congestion and other issues, the letter is unique since it is a public appeal.

"I think it does demonstrate this as an exceptionally important issue, and we feel it's important that Congress act quickly," Healy said.

Where am I?

Should we take offense, order a drink, or what? That depends, of course, on where you think these words turned up.


National World War II Museum

The National World War II Museum in New Orleans dedicates its latest building.

My Trips

Subscribe to the Daily Deal blog Daily Travel & DealBlog

Yalapa, Mexico: Stand-up paddle surf workshop in paradise
Stand-up paddle surfing. The first time you saw it at the beach you probably exclaimed, "Wh...
Read more »

SIGN UP Newsletter_icons

Taking restless Southern California on vacation

Los Angeles Times e-mail newsletter, delivered every Thursday


Expedia
  • Departing from:
    Depart:
  • Going to:
    Return:

Subscribe to this section    

Subscribe to
Save and share