This is a crosspost from the Air Line Pilots’ (ALPA) Pilot Partisan blog.
The Senate Appropriations Committee approved a much-needed boost to the Commodities Future Trading Commission’s (CFTC) budget yesterday. The CFTC is responsible for implementing and enforcing rules to ensure speculative trading in the oil futures market is tightly monitored.
Most airlines utilize hedging strategies to protect themselves from wild spikes and drops in the price of oil. They are legitimate end users of the product, and the CFTC permits the airline industry to continue such legitimate hedging practices. However, many large investors use the derivatives markets to speculate on oil prices, resulting in unsustainable increases in fuel costs. Such speculation negatively impacts our jobs and our industry, which is why ALPA has been strongly advocating for tougher rules and oversight to reduce excessive speculation.