To riff a second day on themes aloft, I'm curious about the airline industry's latest ground offensive on the price of oil.
A lobbying effort, called "Stop Oil Speculation Now," is asking frequent flyers to call or write Congress to enact legislation limiting the price gyrations made possible by the oil futures market. The premise is that speculation on oil prices is somehow unfair or unjust.
This is scary stuff, primarily because it's base scapegoating, and the airlines can't have any reasonable expectation that it's going to work.
There's clearly something strange going on with oil and, while I'm not that much of a conspiracy nut, I do believe that there are influences on the price beyond the senseless movements of an unconscious market. Markets are made up of the actions of people (automatic trading programs aside), and the very idea of a futures contract involves folks betting on a future that they help create by their very acts of gambling.
There aren't really speculators as a defined group of people, as much as there are people who participate in speculation. In agriculture, these people range from family farms to giant agribusinesses, who trade on the hope of shifting the pre-harvest risk of price fluctuations onto others who will take those bets. Same goes for oil, mostly.
Where it gets all nutty is in the function of the markets themselves, in that a futures contract can change hands dozens of times...and each time get priced differently, depending on how circumstances have changed (really or perceptually) since the last price was assessed. Most speculators wouldn't know what to do with a barrel of oil if it were delivered to their doorsteps, so it's somewhat detached from reality.
It's an inefficient system, and it can be exploited by like-intentioned individuals, but it eventually rights itself. Even imperfectly free markets are better than explicitly controlled ones. And there's no possible way an even enthusiastic Congress could hope to regulate what is a global marketplace.
Further, scapegoating an imaginary group as the culprits behind high oil prices (they have no membership cards other than those issues by the futures exchanges) is kind of like targeting illegal immigrants as the basis for America's security and jobs woes. Or like suggesting the greatest challenge to the sanctity of marriage is allowing gay people to wed.
The rabid boldness of such approaches serves to polarize the very conversations they purport to address, so much so that you have to wonder why anyone would embark on them in the first place. Unless there were an ulterior motive. Scapegoating is a tried-and-true gimmick to win elections, for instance.
But why would the airlines pick this battle to fight if they have no expectation of changing the oil futures markets?
The only explanation I can come up with is that they're trying to deflect responsibility for rising airfares: they're victims of an evil cabal of price manipulators, which they've done their best to actively fight through this doomed advocacy campaign. Better yet, if they can pick a fight with the financial services industry and prompt a defense of the markets, the debate gets even more exposure.
They could have played this issue so differently, and much more credibly and effectively for their brands:
- Be honest and direct. If fuel prices are an external variable that impacts ticket price, why not treat it as such? They already segment all of the taxes from the prices quoted to travelers. People are trained to buying fuel for their cars and trucks. The airlines could segment a fuel cost as a pass-through component of ticket pricing...let us know what it really costs, and we can then decide whether we want to pay for it. Instead, we get charges for checked baggage and ever-reduced inflight services
- Use social media for real. The era of contrived, PR-driven interest group advocacy is long gone, and there's no way an industry group can orchestrate a campaign for peoples' hearts and minds without begging the question of what's the profit motive in it? Ads promoting a reduction in home heating costs to visit grandma is simply disingenuous; airlines want to make more money selling more tickets. That's no crime whatsoever, so why not come up with a more flying-focused set of issues for people to blog, chat, and organize upon?
- Remember to do marketing. I don't think I've seen or heard a compelling piece of marketing out of the airline industry in a few years. The lifestyle, emotional nonsense on which they've spent many millions is utterly inert: campaigns like United's cartoons about global business people, or American's funny gate signage about meeting family may be true to their imagined brands, but are irrelevant and unmotivating to consumers. Do any of them think that listing destination cities is interesting to anybody? Instead of blathering on about oil prices, why couldn't the airlines double their work to find compelling reasons why people should fly?
I may be a dim bulb, but it seems like they've picked the wrong battle to fight.
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