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July 17, 2008
top story
Dear BT-e readers,
We'll be resuming our usual mix of travel news and features, along with the latest on deals and discounts, next week. This week, however, we're departing from our usual format to bring you a letter that recently appeared in our inbox and prompted considerable discussion among the editors and staff of BT. In a reflection of these unprecedented times, the CEOs of 12 major U.S. airlines joined together to issue this unique manifesto in which they outline a single strategy to tame soaring fuel prices.
Here at Business Traveler, we're interested in hearing what you think about this letter. In case you haven't already received it, we've published it below, unedited and in its entirety, for you to read and judge for yourself. Tell us what you think of it in your response to this week's Question of the Week: Do you agree that oil speculation is driving the dramatic increase in fuel prices? Ally Miola
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.
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question of the week
Do you agree that oil speculation is driving the dramatic increase in fuel prices?
Question of the Week
Answer the Question of the Week, and you'll be automatically entered into our monthly drawing for a piece of luggage from Travelpro.
Last Week's Question
Although we all know that layovers aren't ideal, what is your favorite way to spend that extra time?
Carole Jesiolowski wrote:
"My favorite thing to do is to first read Business Traveler's "4 Hours In" guide to the city where the layover is, get out of the airport and go!
If a BT guide for that city is not available, I find a cabdriver and go! My first view of San Francisco was during a three-hour layover (of course, this was before the days of having to be at the airport way ahead of time) from the FRONT seat of a cab (better view). I saw lots, and learned many insider tips, and he got me back in time for my flight east."
What would you like to see more of in BT-e. Less of? Let us know. Don't be shy. We want you to get the most out of your weekly business travel update. E-mail your suggestions to: bte@btusonline.com.
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