Carriers want lawmakers to rein inoil speculators

It’s not often that the CEOs of all major airlines, including both legacy carriers and low-cost operators, unite in a single cause. But that’s what happened last week, when the CEOs of a dozen airlines jointly sent out a letter over all their signatures to members of their frequent flyer programs, urging business travelers to help them lobby Congress for tighter regulation of oil speculators. In fact, it goes beyond just airline management: The Air Transport Association (ATA), the airlines’ trade group, has pulled together an industry-wide coalition for this effort, including the pilots’ union, the Teamsters, the Regional Airline Association, airport executives, business travel groups and even non-airline interests like the American Bus Association and American Truckers Association.

Although economists, editorial writers and talking heads on TV continue to debate exactly why the price of oil is skyrocketing, the ATA is convinced that rampant speculation in the oil futures market is the primary villain, and it is undertaking a massive lobbying effort to get Congress to rein in this activity within the next 30 days. The airline CEOs’ letter to business travelers warns that fuel prices are dragging the nation into a “sharp economic downturn” and that air service will face “severe reductions…to both large and small communities.” The letter says that because of rampant market speculation, “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.” The letter suggests that limits on speculation could cut the price of oil by $30 to $60 a barrel.

The letter urges customers to send a message to Congress via a web site the coalition has set up at www.StopOilSpeculationNow.com. ATA Chairman Doug Steenland, who is also CEO of Northwest Airlines, said that within 24 hours after the airlines sent out the letter to their frequent flyers, more than 300,000 of them responded with emails to Congress.