US lobbying group the Air Transport Association of America (ATA) is calling on lawmakers to implement commonsense rules to "muzzle" extreme energy speculation, citing jet fuel as airlines "single biggest factor in cost".
Speaking today at the Aviation Week MRO Americas show in Miami, ATA vice-president of operations and safety Tom Hendricks said: "The cost of jet fuel is driven primarily by oil prices. Despite strong financial reform legislation in the United States and abroad, oil price volatility is still a threat.
"We support the CFTC's [Commodity Futures Trading Commission's] efforts to develop and implement meaningful commodity position limits and greater transparency to help muzzle excessive, almost mind-numbing speculation by those who never intend to use the product, but just buy and sell to churn price and profits."
Earlier this year the ATA urged the CFTC to further reduce speculative position limits for energy, saying limits set in a Notice of Proposed Rulemaking (NPRM) are too high and do not meet the clearly stated requirements in the so-called Dodd-Frank Wall Street Reform Act to address excessive speculation.
In addition to discussing energy speculation in his speech, Hendricks touched on how today's regulatory environment can be improved for airlines. "We need a national aviation policy that recognizes that the airline industry cannot succeed, cannot consistently earn its cost of capital, cannot be the great enabler with a burdensome tax and regulatory structure," he says.
Source: Air Transport Intelligence news
