Air New Zealand slashes flights, cuts CEO's salary amid coronavirus travel slump

Air New Zealand is slashing the number of flights it's offering and its chief executive has taken a hefty pay cut as coronavirus tightens its grip around the world.

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The airline’s seen demand plummet and expects a financial blow larger than previously thought. Source: 1 NEWS

The airline has spoken out previously about its struggles as more countries confirm cases and quarantines.

In recent weeks it's announced several deals with cheap flights to try and stimulate the market, but today it's admitted defeat, noting a decline in bookings across its network.

It's reduced the total number of flights it offers by 10 per cent, and its total capacity into Asia by 26 per cent - a total of around 3220 flights.

Boss Greg Foran is taking a pay cut of $250,000, reducing his salary to $1.4 million.

A hiring freeze is also in place for non-critical roles, operational staff are being offered unpaid leave and the executive team is extending its salary freeze from last May.

Mr Foran says the Covid-19 outbreak has created an unprecedented situation and it's hard to predict what will happen in the future.

"We have been continuously monitoring bookings and in recent days have seen a further decline which coincides with media coverage of the spread of Covid-19 to most countries on our network as well as here in New Zealand," he said in a statement today.

"While we have already made swift adjustments to our operations, we are prepared to take further actions to address the ongoing demand impact of Covid-19."

Air New Zealand also suspended its earlier earnings guidance it released last month.

It had forecast $340 million to $400 million in earnings, down from its earlier guidance of $425 million to $525 million.