Northwest Airlines Corp., the fourth-biggest U.S carrier, said yesterday that it will suspend daily nonstop flights between New York and Tokyo starting Oct. 2 because of the rising cost of jet fuel.
The route accounted for about 2 percent of Northwest's seating capacity in August, the St. Paul, Minn.-based airline said in a statement on PR Newswire. The carrier will re-book passengers affected by the suspension and said New York customers can continue to fly Northwest to Tokyo with stops through its bases in Detroit and Minneapolis.
Northwest has warned repeatedly this year that it may be forced to seek bankruptcy protection and said last week that the time remaining to secure at least $1.1 billion in concessions from its workers is shrinking because of higher fuel costs. The company has also been seeking a change in U.S. laws to allow it to delay making some contributions to employee pension plans.
In seeking to restart negotiations yesterday with its mechanics union, which went on strike Aug. 20, Northwest said the increase in fuel costs will also require it to abandon its most recent offer to the union, made before the walkout began.
Separately, Transportation Secretary Norman Y. Mineta said U.S. airlines may be excused from a federal tax on fuel surcharges added to ticket prices.
Airlines normally must add a 7.5 percent tax to airfares to help finance the Federal Aviation Administration. Mineta said he's considering excusing airlines from the tax for fuel surcharges as a way to help them cope with jet-fuel costs.
The tax exemption is "something we're kicking around here in the department," Mineta said in a conference call with reporters yesterday in Washington.
Airline fuel costs this year will rise by almost a third to $28.1 billion, from $21.4 billion in 2004, the Air Transport Association trade group estimated Aug. 29.