Airlines are reigniting efforts to push for increased regulation of energy market trading, with CEOs of Delta Air Lines and AirTran Airways taking up the mantle in support of new legislation.
Delta chief executive Richard Anderson wrote a memo to U.S. Sen. Blanche Lincoln (D-Ark.) last week in support of her plans for legislation to regulate derivatives. He wrote thatthe oil price bubble in 2007-08 "led directly to a 10 percent reduction in Delta's capacity and the elimination of nearly 10,000 jobs.
AirTran chief executive Bob Fornaro appeared at a press conference in Washington, D.C. Tuesday in support of Lincoln's legislation and discussed the matter during the airline's conference call on quarterly financial results Wednesday.
In an interview, Fornaro said he thinks there is now "a little more incentive to do something."
The proposed changes to improve transparency and oversight of derivatives trading and commodities would be "a big benefit to the airline industry," Fornaro said. "It's very important for managers of a business to understand where all the variables are, and right now, we've got the trading desks of these New York banks controlling the volatility of these costs."
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