American's Northwest Airlines said it will cancel the all-cargo line to Guangzhou in July due to loss brought by surging fuel prices and pressure from the upcoming merge with Delta Air Lines.
Rumours about Northwest's withdrawal from the Guangzhou have long been current. Some large agencies of the carrier have received written notice on a specific date of service suspension.
The carrier said the withdrawal decision was mainly because fuel price hike has made the service unprofitable.
The airline spokesman said the carrier would have managed to make a profit if the oil price remains at US$55 per barrel, but the fact is the price has surpassed $130 per barrel and is still rising, forcing it to retreat.
Analysts said the carrier has not yet walked out of the shadow of bankruptcy. This is in the face of increasing loss from having to stopover at Tokyo and its inability to refresh freight while its Boeing 747-200 are growing old and more oil-consuming.
Increasing fuel prices has hit the world's air industry. With oil prices taking up to 40 per cent of their cost total, carriers are taking various measures such as cancelling services, reducing staff numbers, raising ticket prices or reducing capacity.
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