FloggingSully

Perfectly inelastic goods really only exist in theory, but oil/gas is probably as close to an inelastic good as exists today (at least in the US).

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There's no such thing as a pretty good aligator wrestler.

RYou

I received this email from United today.


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.



Robert Fornaro
Chairman,
President and CEO
AirTran Airways

Bill Ayer
Chairman,
President and CEO
Alaska Airlines, Inc.

Gerard J. Arpey
Chairman,
President and CEO
American Airlines, Inc.

Lawrence W. Kellner
Chairman and CEO
Continental Airlines, Inc.

Richard Anderson
CEO
Delta Air Lines, Inc.

Mark B. Dunkerley
President and CEO
Hawaiian Airlines, Inc.

Dave Barger
CEO
JetBlue Airways
Corporation

Timothy E. Hoeksema
Chairman, President and CEO
Midwest Airlines

Douglas M. Steenland
President and CEO
Northwest Airlines, Inc.

Gary Kelly
Chairman and CEO
Southwest Airlines Co.

Glenn F. Tilton
Chairman,
President and CEO
United Airlines, Inc.

Douglas Parker
Chairman and CEO
US Airways Group, Inc.

The oil companies are in on nthe game. They too are buying into the hedges and when the price goes up they sell for a profit, then buy back in for delivery and you and I pay that price in the retail mark up. Buying playing with the game, they are profiting on the side from hedging while being able to hold the ultimate cost in the retail pricing structure.

Gasoline retailers aren't making any profit on a gallon than what they make at $2 or $3 at retail, so where then are the oil companies making the profit...buying playing the hedging game. It's one of the ways Enron make billions, buying and selling the paper. Big oil can do it better because if they get stuck holding the barrel when the price falls, then can still use it, unlike you and I that has to sell.

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19-0 ? Hell No ! 18 Wins and 1 GIANT Loss !

ArmyFan

Ryou,

Did you really receive that from United? That's a shame. I guess the airlines have nothing to lose. Airlines and utilities are the worst run businesses in the US, in my opinion. There are so many things wrong with the airline industry and they blame high oil prices? All those airline executives should be ashamed of themselves.