The airline industry, which will lose at least 30,000 jobs to high oil prices by the end of the year, is urging Congress to act quickly to curb oil price speculation.
"Oil has become the new gold," said Jim May, CEO of the Air Transport Association, at a Washington news conference Friday.
He said airlines face a crisis that results largely from the role of speculators in the oil market, with investor trades accounting for 20 times the number of physical trades by producers and users. That pushes prices up far above the actual cost of production, which is $65 to $75 a barrel.
After making $8 billion in 2006 and 2007, airlines face an estimated $10 billon loss this year. "Fuel is the only reason for this turnaround," May said. "It's worse than 9/11."
With the exception of
, every major carrier is expected to lose money this year.
Investors, fearing airline bankruptcies, are waiting to hear reports on cash levels, which have been dropping, when carriers report second quarter results.
Reporting begins next week, with
On Wednesday, as part of its speculation initiative, ATA established a Web site, stopoilspeculationnow.com, which has resulted in 1 million e-mail messages being sent to Congress in three days.
Airlines are seeking legislation to limit the amount of speculative trades, require disclosure, and distinguish producers and commercial users, such as airlines, that use the market to hedge against fluctuations. Sen. Joseph Lieberman, D-Ct., recently introduced legislation to address oil speculation.
Reminded that a Transportation Department official has questioned whether speculators are driving up oil prices, May responded: "The current Department of Transportation has demonstrated a lack of expertise in a number of different areas: this is just the latest." He said both major party presidential candidates "have identified speculation as a very real concern."
"There is a bit of airline fatigue on Capital Hill," May acknowledged. "We're not asking for a handout. We're not asking that you intervene financially. We're not asking for any special favors."