Just got this in the email this morning....desparation is in the air, methnks! ============================================================ United(R) ============================================================ An open letter to all airline customers ============================================================ Dear XXXXXXX Last week, crude oil hit an all-time high of $146, and the skyrocketing cost of fuel is impacting our customers, our employees, the communities we serve, and the economy as a whole. United, and the majority of other major U.S. airlines, are asking our most loyal customers to join us in pushing for legislation to add more transparency and disclosure in the oil markets. Please see the attached open letter from the leaders of the U.S. airline industry. ------------------------------------------------------------ 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. 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 StopOilSpeculationNow.com. Robert Fornaro Chairman, President and CEO AirTran Airways Bill Ayer Chairman, President and CEO Alaska Airlines, Inc. Gerard J. Arpey Chairman, President and CEO American Airlines, Inc. Lawrence W. Kellner Chairman and CEO Continental Airlines, Inc. Richard Anderson CEO Delta Air Lines, Inc. Mark B. Dunkerley President and CEO Hawaiian Airlines, Inc. Dave Barger CEO JetBlue Airways Corporation Timothy E. Hoeksema Chairman, President and CEO Midwest Airlines Douglas M. Steenland President and CEO Northwest Airlines, Inc. Gary Kelly Chairman and CEO Southwest Airlines Co. Glenn F. Tilton Chairman, President and CEO United Airlines, Inc. Douglas Parker Chairman and CEO US Airways Group, Inc.
please bail us out. our service sucks, we were too stupid to hedge our fuel costs, and we suck out extraordiary exec compensation, but since Congress is throwing money around, please have them throw some our way...
The US government has to wake up and thinking. Should the government listen to investment banks such as GS who declared that the soaring oil price wasn't due to speculation or listen to people in the field such as Airlines and consumers?
We need change, a change of ways. We need cures, not treatments. We don't need new drilling off our coasts or in Alaska or any other part of the world for that matter. We need to change our ways period. Improved rail system, work closer to home, get on the bikes, etc. Drink a normal size beverage, not some supersize.
Great post. Normally, I'd view a shout out from CEOs of one industry with skepticism, but in this case, they're right. And they're not the only industry convulsing from the record speculation - far from it. Automakers, restaurants, retailers of every kind, home builders, etc. and on and on.... The games people have played with oil futures contracts are in large part responsible for an extreme exacerbation of our economic downturn. But the best remedy for high prices is high prices, and you're going to see that remedy kick sooner rather than later. The fact that oil can't rally off of alleged depletions, Iran, Israel, Nigeria, or a coming asteroid should tell you what the smart money that was long on oil is already doing. http://seekingalpha.com/article/84438-options-trader-thursday-outlook http://tonto.eia.doe.gov/dnav/pet/pet_move_wkly_dc_NUS-Z00_mbblpd_w.htm Oil did just what we expected it to yesterday as the "surprising" draw of 5M barrels surprised no one here, as it's the exact number we predicted 3 weeks ago when they closed NYMEX trading 20M barrels short for July (evidenced by the drop in imports already of 621,000 barrels a day below last month). It was actually worse than it seems for the oil bulls as the refiners got stuck with almost 3Mb of distillates they overproduced for the low-demand weekend. Donât expect oil to come off the floor today and, as long as they stay under $137.50 for the week, weâre happy⦠Another strange thing you will notice looking at that oil inventory link - The US is EXPORTING 1.44Mb PER DAY of petroleum products. That means we are ordering 10Mb PER WEEK, which adds to our "consumption" refining it (I thought we had a shortage of refineries) and then sending 10Mb PER WEEK out of the country so it doesnât show up in inventories. So it appears that we are using 10Mb more per week than we really are, as refiners flip the product over to other countries while oil bulls point to "evidence" of a shortage of product here in the states. Nice scam! Gasoline use is now at a 5-year low after spending a month over $4 and we are now down over 5% from last springâs usage levels. "We think oil is set for a significant correction," says Michael Waldron, an energy research analyst at Lehman Brothers. "But itâs probably not going to occur until the end of this year or the beginning of next year." As evidenced by yesterdayâs intra-day action, we need oil to go MUCH lower before the markets can get it in gear. So we will remain very well covered and very, very careful until we get some resolution to this latest round of bank hysteria and some meaningful relief at the pump.
Well, we bail out IB and their MBS, which is pretty much the same excuses, as well as soon homeowners, why not airlines, GM/F, FNM/FRE, etc. etc.
I got the same letter forwarded from a friend last night. Here's what I replied to him. * OMG, I am personally calling all of these dilettantes tomorrow. Have they no clue regarding deficit spending and dollar depreciation? Of course they'll turn a blind eye to it, as they all are massively donating to the politicians behind the dollar debacle. Ridiculous. Shall we start killing the speculators in ags, metals too? Why not just abolish futures markets altogether along with price stability?