Why Airlines are Whining?
I was forwarded an email the other day, that was apparently sent by Delta, and United (at least) to airline customers complaining about the high price of fuel and blaming the “speculators” for driving up prices, and urging the recipients to support “regulatory limits” (whatever that means).
This has got to be the stupidest, most hypocritical and whiny communication I’ve ever seen from a public corporation.
Why is it stupid? Because we live in a free market economy. Without it there’d be no Delta or United Airlines, nor any of our blessed prosperity. For these products of the American Free Market economy to complain about the free trading of oil as a commodity is ridiculous. By their reasoning we should also have “regulatory limits” on gold, platinum, cocoa, pork bellies, orange juice, sugar cane and a hundred other items that are traded on the commodities exchanges.
And, oh yes, how is anyone, even the US going to regulate a commodity that is traded world wide?–Artificially impose a price control? No one will sell us oil–obviously not a solution.
Why are the airlines hypocritical. Because I bet that the airlines themselves buy and sell oil futures. Just like farmers buy and sell corn and wheat futures. Heck, if fuel were so important to my business, that’s what I’d do. So what are they whining about? Did they make a bad commodity play?
Aside from all this silliness, there is a fundamental truth that every successful entrepreneur should hold to. Do not speak or think in ways that disparage money–like profits made by smart investors (who are no more speculators than anyone who buys a stock hoping it will go up). If you express, envy, or anger at financial success of anyone, all you’ll accomplish is to chase money out of your life. Just look at Delta!
If Delta, decided to take an entrepreneurial approach, they’d be examining their business model to make it more competitive with the leading airlines, and raise ticket prices if necessary. Why don’t they raise their price? The only reason I can think of is that other airlines that operate more efficiently will take business away because they don’t have to raise prices. That’s called competition.
In dictatorships like China, they can just raise prices without improving service, efficiency or anything else. If that’s what Delta needs, they should move to China. Otherwise, they should get a grip, and take care of their business and stop whining to the public–it’s appalling and insulting.
Richard Odessey has been investing in Real Estate since 1999 and have bought, managed and sold over $5MM in assets over that time period. He has created a national network of RE investors that are a source of continual on-the-ground intelligence. Richard has also developed unique and proprietary tools to zero in on only high profit-low risk transactions.
evidently, you don’t pay much attention to the national economy. That’s O.K. The majority of the population doesn’t. 8 U.S. airlines have either shut down or filed BK this year, 24 worldwide. A year from now it’ll be a revamped industry. At $100+ per barrel oil, only the rich, or corporate, or have-to-fly passengers, and the others who will want to get somewhere quickly will be flying. Many people will lose their jobs; airlines, hotels, bars, restarants, resorts, etc. IMO, you ain’t seen the worst of this. Wait until next summer.
In reality, the national economy is not doing as bad as the media would have you believe. As for Delta and United (and any other transportation industry,) what are their biggest costs? Payroll, healthcare, fuel, equipment and maintenance. And this in a service industry where both of them have lousy service.
The wages are artifically high with the unions involved, the health care costs are high due to the malpractice insurance and other high costs for that industry, the fuel costs are artifically high, not due to speculators, (Do you know that the speculators are buying futures that are 8 years out?) but to supply and demand. If the US would produce thier own fuel, then the price would be at least half again lower. If you want the fuel costs down, all we have to do is produce our own. The equipment and maintenance costs are high due to these industries having to pay the same costs as the airlines.
On top of all of that, we have a government imposing economic policies and higher and higher taxes on all of us that drive the costs of doing business way up. That hurts all of us business men and women, big or small.
The airlines must be run by people who believe that the goverment should bail them out. Which is nothing more than a hidden tax on the American public. If they had run their business in a conservative manner then they would not be in this dilemma.
It sounds to me that Craig up above is one of those people who is “chasing” money away. Craig, and others, should quit whining and look at the real reasons behind the scenes. Also, quit watching the news.
My prayer is that I am one of the rich men that gets my camels through the eye of the needle, and when I get to heaven, Jesus will welcome me and say “Well done good and faithful servant.”