September 30, 2005

Top airline cuts flights over oil price

NEW YORK (Reuters) - American Airlines, the No. 1 U.S. air
carrier, on Friday said it decided to temporarily cancel 15
daily round-trip domestic flights from its two largest hub
airports because of the skyrocketing price of jet fuel.

The airline, owned by AMR Corp., said the cancellations
would take effect October 5 and last at least through October
29. After that, they could be restarted depending on what
happens with fuel prices, AMR said in a statement.

In addition to the cancellations to U.S. airports that will
still be served by other American Airlines flights, AMR said it
plans to discontinue service between Chicago's O'Hare airport
and Nagoya, Japan, at the end of October, also because of jet
fuel prices.

Refinery outages caused by Hurricanes Rita and Katrina have
made worse an already bad situation for U.S. airlines. In
addition to record crude prices, the airlines are paying as
much as a 60 percent premium for refined jet fuel.

That has pushed the price they pay per barrel of fuel above
$100, industry association the Air Transport Association said.