ECONOMICS REPORT - Automakers, Airlines Hit by Sky-High Fuel Prices

This is the VOA Special English Economics Report.

There was more evidence this week of the effects of high oil prices on the transportation industry.

Automakers reported further drops in sales of trucks and SUVs, sport utility vehicles, in the United States. Big, fuel-hungry vehicles brought in big profits -- until Americans faced big costs for fuel. Now they want smaller and more fuel-efficient cars.

The head of General Motors, Rick Wagoner, says the prices are changing consumer behavior, maybe permanently. G.M. sales in the United States in May dropped thirty percent from last year. The Ford Motor Company had a nineteen percent drop.

Toyota sales in the United States were down eight percent. But another Japanese maker, Honda, reported an eleven percent increase on strong sales of cars.

General Motors Hummer SUVs are not selling well. GM is considering selling the division.

General Motors announced it will close four truck factories in North America and expand car production. It may also sell its Hummer division. Hummers are military-like vehicles.

But Rick Wagoner said G.M. will go forward with plans to make the Chevy Volt, a car powered mainly by electricity. He says it will be available no later than the end of two thousand ten.

Still, new findings show that Americans are driving less. The Federal Highway Administration says the number of kilometers traveled on public roads has dropped since late two thousand six.

Many people may be driving less because of high gasoline prices. But transportation officials worry that less demand for gasoline will mean shortages of money from fuel taxes that support roads.

Use of public transportation, though, is up. The American Public Transportation Association says it increased three percent in the first three months of this year over last year.

High fuel prices are also affecting air travel. The International Air Transport Association expects the industry to lose at least two billion dollars this year, mainly because of prices for jet fuel.

This week, more air carriers in the United States announced plans to cut flights and jobs and remove older, less fuel-efficient planes from service. Continental Airlines said record-high fuel prices have produced the worst crisis for the industry since the terrorist attacks of two thousand one.

Continental announced Thursday that it will reduce flights in the United States by sixteen percent during the last three months of the year. The airline will cut three thousand jobs, about seven percent of its positions worldwide.

And that's the VOA Special English Economics Report, written by Mario Ritter. I'm Steve Ember.