PLANS for an air link between the North-East and New York have been shelved because of the high price of jet fuel, the operator behind the project said yesterday.

American Airlines blamed tough competition in the US air market for the decision, having announced in the summer it was to offer daily flights from JFK to Newcastle International, starting in May next year.

The carrier was encouraged by regional development agency One NorthEast to open the link, which would have boosted business and tourism, although it did not receive a grant to do so.

John Parkin, Newcastle International Airport's chief executive, was disappointed and blamed "the exceptional market conditions" caused by hurricanes Rita and Katrina, which have caused massive fuel price rises.

He added: "We consider this to be a temporary setback to Newcastle's plans to become a much-needed transatlantic gateway for the North-East region."

Talks will now open with other companies who expressed an interest in operating the service.

Craig Kreeger, American Airlines Europe and Pacific vice president said the route would be "an attractive opportunity, given more stable market conditions".

He added: "We regret that this decision will inconvenience customers who have already been ticketed and we will provide them with alternative flight options for their journeys or a full refund."

One NorthEast chief Alan Clarke said: "We will continue to make every effort to support Newcastle International in seeking an airline to operate this route in the future."

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