Airlines ask frequent fliers for help

An airplane

TEXT OF STORY

Kai Ryssdal: Not a week goes by when we don't get another sign of just how turbulent the airline industry is and now those airlines are literally begging for help from their customers.

Major U.S. carries have sent letters to their frequent fliers asking them to lobby Congress to crack down on speculation in the oil markets.

Marketplace's Jeremy Hobson has that story.


Jeremy Hobson: Airlines have enlisted frequent fliers to ask Congress for help before, like right after 9/11 -- and it worked. This time, they want customers to know that high ticket prices hurt them too.

Seth Kaplan: I think the airlines are trying to present the perspective that, "Hey, we're as much of a victim as you all are.

That's Seth Kaplan of Airline Weekly. He says what's odd this time is that some airlines have benefited from the very thing they're now against. Southwest locked in most of its fuel for this year at about a third of the current rate.

Kaplan: There's no more important factor in their profitability than some very well-timed hedges. That's speculation.

And it's debatable that removing speculators will be the silver bullet now. Ruchir Kadakia is with Cambridge Energy Research Associates.

Ruchir Kadakia: All it's going to do is actually just increase volatility because now you have producers and consumers trying to find a pricing mechanism and price discovery in a market with fewer participants.

Congress already has more than a dozen bills on the table to cut back on speculation.

In Washington, I'm Jeremy Hobson for Marketplace.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...