United is slashing 100 jets from its fleet, cutting 1,600 jobs, and blaming a $3 billion fuel bill.
The rest of the auto industry could follow suit as consumers finally give up on gas-guzzling trucks and SUVs. From today's Wall Street Journal:
Jim Farley, Ford's group vice president of marketing, said in a conference call: "I would say [it's] the most dramatic shift in customer segmentation potentially in two or three decades."
It's tough to blame them, when $4-a-gallon gas means a new Ford F-250 will cost you $100,000. That, from David Leonhardt in the New York Times:
If gas remains near $4 a gallon, as many analysts expect, a big vehicle like the F-250 will cost $100,000 for an owner who keeps it for a typical amount of time (five years) and drives it a typical amount (15,000 miles a year). The gas alone would cost about $30,000, up from about $10,000 in the 1990s.
For auto stocks, the headlines are good news for foreign automakers with big footholds among smaller-car brands. Shares of Nissan, Honda, and Toyota all jumped in early trading, even though they've undeniably suffered along with their American counterparts this year as North American demand slumps.
Lastly, check out this tidbit from Discover's U.S. Spending Monitor. A year ago, 23 percent of the country's households spent $200 a month on gasoline. Now, 36 percent do. It's tough to see how that won't translate into lower consumer spending if gas prices stay where they are. The survey also says more than half of consumers have reduced their living expenses to cope with the high cost of gas. Given the consumers' outsize influence on economic growth, Wall Street may still have to do some reducing of its own.