Airlines Urge Customers to Fight

As oil prices soar, airlines are calling on their customers to help put an end to oil speculation. AirTran sent an open letter to customers, urging them to contact Congress and reform oil markets. Other major airlines noted in the joint letter include: American, Alaska, Continental, Delta, Hawaiian, JetBlue, Midwest, NWA, Southwest, United, and U.S. Airways. These airlines have joined forces to fight rising oil prices by promoting regulations to control excessive market speculation and manipulation.

The airlines said in their joint letter that excessive oil prices are playing a large part in the overall slowing economy. Conservation and increased energy supplies need to be addressed, but market reforms are first needed.  

In coordination with StopOilSpeculationNow.com, these major airlines argue that regulations established seventy years ago to control “excessive, largely unchecked market speculation and manipulation” have been weakened or removed.

Fadel Gheit, managing director and senior oil analyst of Oppenheimer Equity Research said, “I firmly believe that major investment banks, commodity index funds, and other financial speculators have played a key role in the current crude oil price bubble.” Supporters believe that the Commodity Futures Trading Commission (CFTC), established in 1974, has not curtailed market speculation in the last twenty years.

Supporters want Congress to reestablish strict position limits on energy commodities and place foreign boards under the same regulations while trading in the U.S.

Supporters of stricter regulations also want the ‘Enron Loophole’ removed. In 2000, Congress passed the Enron Loophole to remove the CFTC’s authority to monitor speculative energy trading. This allowed speculators to trade commodities with little or no supervision.

To ensure fairness of trade, supporters urging the end of oil speculation, want all energy trades to be regulated similar to those practiced in the NYMEX.