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Struggling Airlines Issue Urgent SOS to Customers

July 09, 2008 5:31 PM

Airlines_080709_blog Twelve airline CEOs came together on Wednesday to point fingers in the fuel crisis that is crippling their businesses.

In an open letter to airline customers, the leaders of the major carriers ask travelers to stand by them in trying to prevent oil speculators from trading oil futures that raise the price of fuel with each trade.

Many carriers have recently announced that thousands of their employees will soon lose their jobs as the airlines scale back their operations. With the airlines doing all they can to afford to do business as the cost of fuel rises, they tell travelers, "This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers."

The letter asserts that there is "another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation."

The Air Transport Association, the group that represents the airlines, has been making noise about oil speculators for weeks and speaking up about how critical their business is to the overall health of the U.S. economy. But this is the first time they've teamed up to make such a loud statement directly to the nation's travelers.

"This nation's economy is inextricably linked to the viability of its air transportation system," ATA’s executive vice president and chief operating officer John M. Meenan testified before Congress on June 24. "If the airlines continue to spiral downward, so will the economy. Aviation contributes $690 billion to the U.S. GDP – that's 10 million new jobs."

According to the ATA, the price of a barrel of jet fuel to date this year has soared to $139.52. The comparable price of jet fuel was $81.94 just last year.

What do you think about this take-it-to-the-public campaign? Fair move, given the meteoric spike in oil prices? Or desperate move from an industry that's crashing and burning and needs to do all it can to survive and make a profit?

-Kate Barrett

July 9, 2008 | Permalink | User Comments (55)

User Comments

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The airline industry deserves no sympathy.

They have spent decades searching out new ways to screw their customers and now they issue an appeal for support?

Let them figure out how to get their planes to their destinations on time and how to keep travelers from sitting on the tarmac for hours and so on.

Remember that this is the same industry that charges $15 for the first checked bag while simultaneously restricting and discouraging carry-on bags. These are the folks that won't provide a meal on a cross-country flight and who won't let you carry a soda onto the plane.

Let 'em fail.

Posted by: Erik | Jul 9, 2008 6:01:16 PM

Are top level executives willing to take a pay cut? Or will "the regular people's jobs" be cut and the company on the verge of collapse while top executives enjoy their multi-million dollar compensation? I agree we need to take action and prevent the oil and fuel crisis from crippling our nation but I have little sympathy for the airlines.

Posted by: JC | Jul 9, 2008 6:14:38 PM

I think we should all work together to help solve this problem. It's not for any one person or persons to solve on their own.

Posted by: A | Jul 9, 2008 6:25:44 PM

Erik says 'let 'em fail' thats like saying let the US economy collapse.... IDIOT

Posted by: Erik_is-IDIOT | Jul 9, 2008 6:25:45 PM

This is a cry for help - and a serious one. For major air lines to make such a bold statement - People, this is serious. What if you needed to get to another destination and in a hurry due to a death, family illness, important meeting, etc? And there were no airlines to fall back on to get you there? Or the price of the ticket was out of your price range and you couldn't get home for your family members funeral? And you couldn't afford to get there due to the price of gasoline? What then? - I agree with them, and yes, we should try to help. Greed and Power is what this crisis is about and it's totally out of control.

Posted by: S Hogan | Jul 9, 2008 6:32:20 PM

Corporate America has never stood by the consumer. Why should the consumer stand by corportae america now? Let corporate america issue a goodwill gesture towards the public and the public will respond in like.

Posted by: Horton | Jul 9, 2008 6:37:06 PM

I remember American Airlines asked their employees to all take pay cuts to keep their jobs, and then not a year later management rewarded itself with millions of dollars across the leaders of the company for all the success they had in cutting cost. That really put a bad taste in my mouth about what a company could do to it's own employees.

Now that they are asking for help, are we just setting ourselves up for the same treatement where only management rewards themselves yet again for their initatives.

Posted by: Quincy Brown | Jul 9, 2008 6:38:25 PM

How, exactly, do the airlines think their average customer is going to stop oil speculation? We're talking grandmothers going to see grandchildren, friends flying to visit friends, people trying to get to sick relatives... maybe a few first class flyers have the wherewithall to control the speculation, but certainly not me.

Posted by: Sheila | Jul 9, 2008 6:46:55 PM

Obviously Eric doesn't need to fly to perform for his job. If he even has one.

Posted by: Paula | Jul 9, 2008 6:52:56 PM

Why is it the US airlines function at a level below those in the rest of the world!!! Someone needs to address the big picture this is not just about oil prices.

Posted by: joe | Jul 9, 2008 6:55:56 PM

Give me a break...I just viewed a TV program on MSNBC the other night about American Airlines. Their CEO, Arpey, made sure he put aside over 100 million in bonuses for 900 plus top level corp executives last year and into 2008. Explain to me exactly how they deserve anything but their inflated salaries for running a failing airline??? His excuse was unintelligible and vague. What did the blue collar guys get> LAY-OFFS!!!!!

Posted by: Gry | Jul 9, 2008 6:56:07 PM

What the heck do they think we can do. If we could do something, we already would have. It is leadership from Washington that is lacking. They play partisan politics instead of solving problems.

That commerical with Barbara Pelosi and Newt Gingrich cracked me up. Senator Pelosi, you might find this news, but YOUR THE SENATE MAJORITY LEADER. Do something. And Newt, what is your idea....beside more drilling.

Posted by: Ken | Jul 9, 2008 7:01:04 PM

Business is Business. Airplanes run on fuel. Instead of whinning to the general public they should just pass on the cost to the consumer. This country has no energy policy so don't blame the market for the stupitity of the past.

Posted by: BYO | Jul 9, 2008 7:09:26 PM

What can you do? Vote out the Republicans. They have control of the White House and effective control over the Senate (Lieberman caucuses with the Dems, but votes with the Republicans). This is a problem the Republicans have created.

Posted by: Kirk | Jul 9, 2008 7:14:46 PM

One word... "Regulation" Thats all

Posted by: Chris in NC | Jul 9, 2008 7:18:16 PM

Kirk if you believe that the Republicans have caused the energy issues existing today you must be brain dead or just plane stupid. The reasons behind the problems today with energy are spead over the last thirty years. A little investigation into this will shed a lot of light.

Posted by: BYO | Jul 9, 2008 7:20:42 PM

While it is true that a healthy airline industry strengthens the economy, the airlines shouldn't expect their customers to stand by them on this one. Most of the airlines have made customer service a thing of the past - flight attendants are often rude, flights are often delayed, and in an attempt to save money, most airlines have started designing more cramped seating, have cut out basic services like complimentary snacks and now, even charge for bags. In this economy, it's every man (or woman) for themselves, and most of us realize that the airlines are no friend to the common consumer.

Posted by: Yasha | Jul 9, 2008 7:36:36 PM

Regulating oil speculators is exactly what Barack Obama is offering and has offered in recent months, has anyone picked up on this? Barack will be a great President.

Posted by: Joe Reed | Jul 9, 2008 7:36:44 PM

I am MAD from the story I heard tonight on the ABC News. AIRLINES Chrg for 1,2,3rd luggage; soon charge for seat request, Aug no more free drinks,water or soda. EXCEPTions: the RICH who can afford 1stclass; Military; unsupervised minors; & Frequent flyers!! I have no problem w/all the above EXCEPT - Frequent Flyers UNLESS those who deserve those flyer miles were the ONLY ones cashing in. AIRLINES s/check on all the families using OTHERs FREEBIES...WHAT A RIP off Promotion. THAT should be seriously checked before "US" middle class get HIT again paying for all those around us who are cheating the system for a FREE RIDE!!!! OUCH! thx- DA 7-9-08

Posted by: dee | Jul 9, 2008 7:37:38 PM

I have a couple of friends who are American Airlines pilots. They were forced to take a 21% paycut. Then the executives awarded themselves millions in bonuses. One of them told me the other day that the same thing is happening now, the execs are crying broke and trying to scare them into giving up more.

They also told me that at AA the customer is ranked dead last in order of importance, just after the employees. First are the stockholders, which includes all of the execs.

Southwest is doing great. They put employees and customers first. They were smart, and bought fuel contracts early at a reasonable price.

Those airlines got themselves into this mess, let them get out themselves too.

Let the execs work for a dollar a year and put the rest of their salaries and benefits toward fuel. Let 'em sink. The airlines that know what they're doing will eventually pick up the slack.

If these scoundrels get bailed out, we'll be stuck with the same crappy service we get now ....


Posted by: steve | Jul 9, 2008 7:54:03 PM

Until we get rid of this corrupt government of ours then nothing will change. I agree that market speculators have yielded an invisible hand decrying that there is more demand than supply.

The Bush/Cheney government has to be culpable as well as collusion among oil companies. This is what this government gets for their Laissez-faire attitude towards oil companies and the deregulation of the energy industry.

Posted by: rkadije | Jul 9, 2008 7:55:43 PM

On my most recent flight, we were informed by the flight attendant that they were "nearly out of food" and the only thing they could SELL us were $5 bottles of water and $5 tiny cans of nuts. PLUS, they announced that they no longer accepted cash. Sure Airline Execs! We the lowly passengers support you 100%!!! Please.

Posted by: PhillyPaul | Jul 9, 2008 8:03:10 PM

It is impossible to regulate speculators in the free market. Yes it is true that they are increasing the cost of a barrel of oil but regulating them in the U.S will do nothing. Speculation will just be done on the other markets of the world. It is the rediculous interference by the government of the U.S with the no drill policies of the past 30 years and taxing oil companies out of investing in this country that has lead us to be in this situation. You can't regulate something that you have no control over and that is exactly what is happening now with oil. The free market is working get use to. We live in a capitalistic country.

Posted by: JoJo | Jul 9, 2008 8:05:46 PM

When the airline CEO's stop taking millions and millions in pay, I will start feeling sorry for them. I'm a pilot, I'll fly myself where I need to go.

Posted by: avflyer | Jul 9, 2008 8:05:59 PM

I still have my Honey Roasted Peanuts package from my last flight 4 years ago. You can have that back; please send me a prepaid FEDEX mailing box.

Posted by: August | Jul 9, 2008 8:08:23 PM

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