Airlines say that there needs to be more regulation on oil speculators. (Photo courtesy of NASA)
Recent swings in the price of
crude oil are leading to more
trouble for the US airline
industry. Rebecca Williams
reports:
Transcript
Recent swings in the price of
crude oil are leading to more
trouble for the US airline
industry. Rebecca Williams
reports:
Even though oil futures are trading for half of what they were last summer, the airlines are not happy.
David Castelveter is with the Air Transport Association. He says wild price swings for oil make it tough for the industry to plan ahead.
“They hedge their fuel purchases when the price is high at a lower rate and if the price of fuel goes low then they’re hedged in at higher rates and it costs them money.”
Airlines would like to raise ticket prices, but, with the recession, they’re worried no one will buy them.
So instead, they’re trying to cut back on how much fuel they use. Airlines are retrofitting planes with winglets that cut fuel consumption.
But that takes money and time. So in the meantime, they’re also cutting jobs and routes.
The industry’s putting pressure on Congress to force more transparency in the oil futures trading market.
They’re hoping more regulation on oil speculators would mean fewer price swings.
For The Environment Report, I’m Rebecca Williams.