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M&T Enterprises workers refuel and unload baggage and cargo from a Calm Air plane at the Rankin Inlet airport in June of 2008. - Darrell Greer/NNSL photo

KANGIQLINIQ/RANKIN INLET - First Air will no longer offer jet passenger service between Rankin Inlet, Thompson, Man., and Winnipeg, the company announced late last Friday.

The airline has cancelled the service as of Sept. 14, and customers with reservations after that date can contact the company or their travel arranger for a full refund.

The reason for the abrupt announcement is the loss of passenger traffic as of Apr. 1, when the Government of Nunavut awarded the contract for medical travel in the Kivalliq region to Calm Air and Kivalliq Air.

"It represented a material financial loss," said Scott Bateman, vice president of commercial operations.

The rising cost of jet fuel is a challenge for all airlines in the North, but "most of us were able to manage it," he said.

First Air could not manage the loss of medical contract.

Bateman said he does not foresee any other adjustments to First Air's scheduled flights.

The airline will continue to offer scheduled jet freight service using its Boeing 737s three times a week, which includes federal Food Mail deliveries.

Rebecca Condon, vice president of marketing and sales for Calm Air, said the news that First Air was dropping its passenger flights to Winnipeg came as a surprise, but the airline will be examining increased requirements for that route and may make adjustments accordingly.

Lorne Kusugak, mayor of Rankin Inlet, said he was disappointed by the news about First Air.

"I've always taken First Air south and it was always a pleasant flight," said Kusugak. "I was shocked, actually, because they've been a carrier for such a long time and it's our only direct link to the south - a non-interrupted flight to the south.

"The other airlines offer five hours from Rankin to Winnipeg; this was just a couple-of-hours flight."

Dismayed as he is, there's another part of Kusugak that sees the cut as a sound business decision by First Air.

"I could see why they would pull out," he said. "At the end of the day, there isn't enough for two big carriers to be transporting passengers to and from."

With First Air out, there's an opportunity for another major air carrier to move in, he added.

"On the other side of the coin, it gives an opportunity for maybe Canadian North or other big carriers to take another look at the feasibility to and from Winnipeg," he said.

- with files from Guy Quenneville