Economists have begun to voice concerns that the price of gasoline, which is usually high, could damage the U.S. recovery and make the recession in Europe worse. That is probably true. An American who drives 20,000 miles a year faces paying $1,000 more for gas this year than last, based on AAA data, if he has a car that gets average gas mileage. In a state like California, where the price of a gallon of regular gas is nearly $4 a gallon, the number could be closer to $1,300. That is a lot of money for the average U.S. household with an income of slightly over $50,000 a year before taxes.
The consumer’s gas price is only part of the problem. The costs to companies is nearly as bad. That is not evident anyplace more than in the airline industry.