High fuel costs prompts Continental to suspend Saipan flights

ABS-CBN News

Posted at Jun 14 2008 04:34 PM | Updated as of Jun 15 2008 12:34 AM

Agence France-Presse

SAIPAN - Continental Micronesia said Friday it would suspend the only flights directly linking the US-administered Northern Mariana Islands to the Philippines because of soaring jet fuel costs.

The unit of US-based Continental Airlines said the three times a week return flights would end from July 16 and it plans to lay off hundreds of employees at its Guam hub and around the region.

The airline will also suspend flights from Guam to Hong Kong in July and to Bali from October.

The decision to stop flying between Saipan and Manila will affect thousands of Filipino workers in the Northern Marianas and hurt tourism to the islands, already suffering the effects of Japan Airlines' decision to end scheduled flights from Tokyo to Saipan.

Northern Marianas Governor Benigno R. Fitial said Continental's decision was another major blow to the tourism-dependent islands.

Continental Micronesia chief executive Mark Erwin said the skyrocketing rise in fuel costs had made the suspended routes unviable.

"Each dollar of oil increase has an annual impact to Continental Airlines of 45 million US dollars," he said.

"While these are very difficult decisions to make, the record fuel costs, combined with lower customer demand in these markets, lead to the decision to suspend service," Erwin said in a statement.