The Airline Oil Spin

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The U.S. Airline Industry is wracked with problems. And the airline industry is working hard to pin all of those problems on “oil speculators,” by creating pseudo-grassroots campaigns like their recent effort to push legislation to stop some kinds of oil speculation.

But, the public is now beginning to see through the Airline Oil Spin.

The public is beginning to ask questions like:

  • Why does much of the proposed legislation limit some oil speculation, but allow the airlines themselves to continue speculating?
  • Why has the airline industry continued to fly the equivalent of “Hummers”, while airlines in other parts of the world have shifted to more fuel efficient planes?
  • Why, as documented in a recent report Shortchanged, has the airline industry received more than $8.5 billion in taxpayer assistance since 2001 while passenger service standards and job quality standards have fallen?
  • With airlines showing disregard for passengers and their workers, why should Congress be doing them favors by exempting companies like airlines from limits on oil speculation?

The Airline Oil Spin is a resource where we can help one-another see through the airline industry’s attempt to distract from the array of problems faced by the traveling public.

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"And who are these "speculators" driving up prices? The futures market operator Intercontinental Exchange says that an increasing share of its customers are not financial houses but commercial firms that need to manage oil-price risks – refiners, airlines, and other major energy consumers. Another term for these 'speculators' would be 'American business.'"
    -Charles Schumer, Wall Street
     Journal, June 10, 2008

The ATA argues airline hedging programs aren't speculative trading because the trading profits are used for jet fuel, meeting that careful definition of a "related commodity." The carriers' motives are somehow more pure than, say, a pension fund that uses trading profits to boost the retirement accounts of its members. If the ATA succeeds in getting Congress to support its proposal, that provision of the law might someday be known as the "Southwest loophole.
    -Loren Steffy, Houston
     Chronicle, July 11, 2008

"The falling price of oil is good news. But for an industry that has been grounded by losses as long as the airlines, it is no panacea."
    -Heidi N. Moore, Wall Street
     Journal, August 12, 2008