Thursday, July 10, 2008

I May Never Fly Again!


These are desperate times for the nation's airlines. With one exception (Southwest), they are all losing money, and are looking for ways to save their asses even as jet fuel prices are rising out of control. US Airways now says it will start removing entertainment systems (i.e. - the video players that show movies) from most of it's planes... a move that will reduce travel weight by 500 pounds and save the airline 10 million dollars a year.

Sounds pretty desperate to me. And as if I needed even more proof, I received this letter from Hawaiian Airlines, which has joined with every other US Carrier to urge consumers to get Congress to hold the line on rising fuel prices! Here's the letter:

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
www.StopOilSpeculationNow.com.

I don't honestly know whether the airlines are in genuine crisis, or whether they are just trying to save their companies' stock prices, but either way, it's going to cost me much more as a consumer to fly anywhere. As someone who has come to enjoy 140 dollar flights to Orlando and 250 dollar flights to L.A., this is a bitter pill to swallow.

Not that I can afford to swallow anything any longer... If these hard times continue for airlines, the once-unthinkable notion that they'll start charging passengers by the pound to travel could, in fact, become reality!

1 comment:

Deb said...

I agree with you. Is it really a crisis - a supply demand issue or something more sinister.


Good post.