Airlines To Passengers: Blame Oil Speculators

Jul 9, 2008 (The Politico)

Airlines are trying to divert Their frequent flyers' fury to a new villain: oil speculators.

On Wednesday, AirTran sent out an e-mail encouraging their passengers to urge Congress to crack down on commodities investors – labeled by opponents as “speculators.”

“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,” says the email, which went out to members of AirTran’s A+ Rewards Program. “Normal market forces are being dangerously amplified by poorly regulated market speculation.”

The letter was sent out in coordination with the Coalition to Stop Oil Speculation, a lobbying group of 12 major airlines formed with support from the Air Transport Association of America.

Investors are a convenient scapegoat for the airlines, who’ve angered passengers with new fees, poor customer service, fewer flights, and higher prices.

The group has run ads in major papers, sent letters to Congress and is now enlisting the help of their customers to “stop the oil price bubble.”

The group acknowledges that the country must invest in alternative energy sources, conservation, and exploration. But, they argue, America also needs, “fair markets, curbing excessive speculation with tough, fair rules that protect consumers and lower prices.”

Commodities speculation is a hot topic in Congress, where investors are being blamed for skyrocketing food and fuel prices.

Over the past few years, institutional investors have poured money into the commodities markets as a way to hedge against inflation. Congressional Democrats and both presidential candidates argue that the influx of investment has driven up prices for gas, food, transportation, and a host of other consumer goods.

But the administration, regulators, and Wall Street say investors had little effect on oil prices.