Business Travel News - July 28, 2008 - (Page 32)

FORUM BTNonline.com OP-ED How To Attain $99-A-Barrel Oil By Labor Day oil futures could drop the cost of oil to $65 within 30 days. Transparency and oversight would move commodity markets away from oil speculation. On June 26, the U.S. House of Representatives passed by a 402 to 19 vote the Energy Markets Emergency Act (H.R. 6377). This legislation directs the Commodity Futures Trading Commission to invoke its emergency authority under the Commodity Exchange Act to ensure that the market price for energy commodities accurately reflects the forces of supply and demand. Senate Majority Leader Harry Reid (D-Nev.) agreed to fast-track the legislation in the Senate, but Republicans are seeking to link this legislation to opening up offshore drilling, blocking a Senate vote. CFTC regulates speculation and investigates abuses. Sadly, it lacks staff and resources to take on this issue. CFTC’s own data shows that speculator participation in the energy futures markets has increased from 37 percent in 2000 to a high of 71 percent in 2008. Assets allocated to unregulated commodity index strategies rose from $13 billion at the end of 2003 to $260 billion as of March 2008. The result is an energy market that enriches speculators at the public’s, and travel industry’s, expense. Additional provisions in H.R. 6341 would grant CFTC authority to impose new position limits, increase margin requirements and take corrective action to eliminate manipulation, fraud and excessive speculation in the energy marketplace. Legislators have focused on transparency, margin requirements and position limits regarding commodity speculation. Transparency would allow the public to have greater access to see parties driving the oil spike. Continued on page 34 DAVID MEYER Editor-in-Chief (646) 654-4431 (dmeyer@btnonline.com) CHRIS DAVIS Executive Managing Editor (646) 654-4437 (cdavis@btnonline.com) JAY BOEHMER Airline Editor (646) 654-4434 (jboehmer@btnonline.com) MICHAEL B. BAKER Hotel, Expense/Payment Editor (646) 654-4433 (mbaker@btnonline.com) SETH HARRIS Travel Management Editor (646) 654-5716 (sharris@btnonline.com) ELISSA HUNTER Meetings, Ground Transportation Editor (646) 654-4432 (ehunter@btnonline.com) ERIC WONG Art Director (646) 654-4439 (ewong@btnonline.com) • CONTRIBUTING EDITORS AMON COHEN +44 (0) 1963-351-219 PATTY DONMOYER (pdonmoyer@aol.com) We welcome your letters, comments and feedback. Please contact the editor at dmeyer@btnonline.com. For breaking news and original research, and to search articles since 1996, visit BTNonline.com. The travel industry has not faced such a challenge as the new oil crisis since 9/11. Gas costs now consume 40 percent of an airline’s expense. The rapidity of the increase of fuel prices has placed airlines and the travel industry in peril. Some argue the crisis is a demand problem caused by the economic growth of such countries as China and India. Others argue the problem is speculation by big money bidding up oil futures. If you opt for the de- Michael Whitesage President Prism Group, Inc. mand theory, a solution is at least three to five years away, and requires Congress to open up offshore or Alaskan reserves. Expanding domestic production is a long-term solution and reaching political consensus will be a challenge If you view the problem as speculation, a solution is within sight. In hearings before the House Energy and Commerce subcommittee on oversight and investigations, oil analysts suggested that without speculation, the cost of oil would be about $65 a barrel. There was no consensus, but some said U.S. currency fluctuations could add $10 to 20 a barrel. This would still put oil below $100 a barrel, a price carriers said they can manage. Several oil experts predicted commodity regulation of OP-ED Airline Unbundling Undermines Satisfaction you. Most likely, you will book your trips in advance. Be willing to connect to get to your destination and even move your trip to save money and it will not be a large impact. Business travelers will be impacted the hardest. They are the ones who travel with the shortest amount of time to plan—hence they are subject to higher airfares. They are the least able to move their apContinued on page 35 NANCY LAZARUS Research Director • SUBSCRIPTION SERVICES (847) 763-9050 Fax: (847) 763-9037 LIST RENTAL/POSTAL INFORMATION JULIUS SINGLE (845) 731-2731 E-MAIL INFORMATION WAYNE NAGROWSKI (845) 731-3854 CUSTOM REPRINTS OF 500 PIECES OR MORE: KRISTI FULKERSON, The YGS Group (800) 290-5460, ext. 144 (BTN@TheYGSgroup.com) BTN EDITORIAL & SALES OFFICES 770 Broadway New York, NY 10003-9595 Editorial Fax: (646) 654-4455 All Rights Reserved With increasing fuel costs, travel- ality that they caners are incurring more charges for not survive. premium seats, bags and changes. This is important Just look at the number of airlines because the fewer that went out of business in the past the airlines, the less three months. On one occasion, the competition and three went out of business in one the higher the airweek—ATA, Aloha Airlines and Skybus—all U.S. carriers. With no end in sight for fuel inGeneral Manager, Corp. Sales creases, airlines are Kintetsu International scrambling to merge with each other, as Northwest and Delta will do by year- fares. This will have the most impact end, pending DOT approval. For on business travelers. If you do not many, it will be a matter of time be- travel on business, chances are that fore they are faced with the grim re- all of this has a minimal impact on Aash Shravah 32 Monday, July 28, 2008 www.BTNonline.com Business Travel News http://BTNonline.com http://BTNonline.com http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - July 28, 2008

Business Travel News - July 28, 2008
Contents
Inside Track
Profile
Newsmaker
BTN Research
Forum
Aviation
Lodging
Ground Transportation
Meetings Today
Travel Management
Expense/Payment
Destinations
Executive Dashboard
Washington Wire

Business Travel News - July 28, 2008