On top of fuel-related price rises, the phasing-out of free drinks, and tough security measures, more misery is about to be heaped on America's air passengers: a major airline is cancelling its in-flight film service.

US Airways will stop showing films on all domestic flights this autumn, since the need to save money has become a more pressing concern than making sure customers are entertained.

Rising aviation-fuel costs are eating into profit margins and, by removing video systems that weigh more than 500lb (227kg) each, US Airways hopes to save $10m (£5m) each year. The move will also save the company from having to pay many millions to film studios to secure broadcasting rights.

Download the new Independent Premium app Sharing the full story, not just the headlines

If other airlines follow suit, it will spell trouble for Hollywood's already cash-strapped producers. So-called "non-theatrical" distribution contributes an estimated $25m-a-year to each major studio, with film and television sales to airlines accounting for roughly 80 per cent of that total. Since studios are already counting the cost of the recent 100-day writers strike, together with an ongoing pay dispute with actors that has the industry in a state of "virtual strike," the news comes at a bad time.

Most are trying to put a brave face on things, in public at least. "I don't expect the national airlines will follow suit," Julian Levin, Fox's executive in charge of non-theatrical sales, told the Hollywood Reporter. "I think they will continue to offer entertainment to their passengers, even in the extremely difficult environment of rising fuel costs." Another executive told the newspaper: "This is probably not an industry trend, as US Airways is in the most trouble right now."

The wider troubles facing the air industry are still likely to hurt Hollywood because of big cuts to the total number of daily flights. Deals between studios and airlines vary but fewer flights generally means lower revenue for film-makers.