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RANKIN INLET - First Air will no longer offer jet passenger service between Rankin Inlet, Thompson, Man., and Winnipeg, it 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 April 1, when the Government of Nunavut awarded its medical travel contract for the Kivalliq region to Calm Air and Kivalliq Air.

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

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.

It 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 came as a surprise but that airline will be examining increased requirements for that route and may make adjustments accordingly.