Air New Zealand has withdrawn its full-year earnings guidance and is further slashing capacity due to a sharp slump in demand and increased uncertainty about the duration and scale of the coronavirus outbreak.

Despite attempts to mitigate the reduced demand by redeploying fuel-efficient Boeing 787s and tactical pricing, the airline is now reducing capacity by about 10 percent across its network as it further consolidates flights.

This includes capacity cuts into Asia of 26 percent through to June and extending the suspension of its Shanghai service through to the end of April.

READ: Emirates introduces increased disinfection on all cabins

Tasman capacity is being reduced 7 percent through June, while capacity to the Pacific Islands is being cut by 6 percent.

Domestic capacity is being cut 4 percent with a 10-15 percent reduction in March and April.

The further cuts mean AirNZ will reduce long-haul international capacity by an overall 11 percent.

The airline as recently as February 27 estimated the impact of the coronavirus at between $NZ35m to $NZ75m with forecast full-year earnings of $NZ300m to $NZ350m.

It withdrew this in response to an additional softening of demand over the past week and a decline in bookings across its network driven by the further spread of the coronavirus.

Air New Zealand chief executive Greg Foran said it was increasingly clear that COVID-19 had created an unprecedented situation that made it difficult to predict future demand patterns.

“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.

Other actions in response to the swift decline in demand include the deferral of non-urgent capital spend and non-critical business activity across operational and corporate functions.

Chief Executive Officer Greg Foran has voluntarily offered to reduce his base pay of $NZ1.65 million by approximately 15 percent, or $NZ250,000, and Air New Zealand’s executive team will extend a salary freeze that has been in place since May 2019.

The airline has also implemented a hiring freeze for all roles that are non-critical and will offer operational staff the option to take unpaid leave in addition to managing annual leave balances.

“Air New Zealand is a strong and resilient business operated by a world-class team with deep experience having navigated prior shocks to our business and industry,’’ Foran said.

“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.”

Qantas has also signaled it expects further capacity cuts after announcing a series of route changes on Friday. There is speculation this may include grounding up to half of its Airbus A380 superjumbos.

Emirates has introduced complete disinfection of all aircraft cabins for flights departing Dubai in response to the Coronavirus.

The extra steps go above and beyond industry and regulatory requirements to ensure its passengers’ health and comfort, and provide them with confidence and peace of mind when planning their travel.

On all aircraft departing from its hub in Dubai, Emirates says it has implemented enhanced cleaning and complete disinfection of all cabins as a precaution.

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In line with the latest expert medical finding that the COVID-19 virus is primarily transmitted by touch, Emirates has placed its greatest focus on surface cleaning.

The airline says it is using an approved chemical that is proven to kill viruses and germs, leaves a long-lasting protective coating against new contamination of viruses, bacteria and fungi on surfaces, and is eco-friendly.

The cleaning process includes a comprehensive wipe down of all surfaces – from windows, tray tables, seatback screens, armrests, seats, in-seat controls, panels, air vents and overhead lockers in the cabin, to lavatories, galleys and crew rest areas. All of this is done in addition to other normal procedures such as changing headrest covers on all seats, replacement of reading materials, vacuuming, and more.

To complete this thorough cleaning process within an hour while the aircraft is preparing for its next mission, requires a team of 18 trained cleaners on a Boeing 777, and a team of 36 for an A380. In a 24-hour period on an average day, some 248 aircraft go through this process.

Watch the video on Emirates’ enhanced aircraft cleaning process.

On any aircraft that were found to have transported a suspected or confirmed COVID-19 case, Emirates would go even further and implement deep cleaning and disinfection in a process that takes between six to eight hours to complete. This includes the defogging of cabin interiors and misting with disinfectant across all soft furnishings, and replacement of seat covers and cushions in the affected area. The aircraft’s HEPA cabin air filters will also be replaced.

All of Emirates’ aircraft are fitted with HEPA cabin air filters which are proven to filter out 99.97% of viruses. They also remove dust, allergens and microbes from the air recirculated into the cabin and cockpit, which helps to provide a safer, healthier and more comfortable environment for the passengers and crew.

The airline has also added flexibility, choice, and value for passengers with the ability to change their travel dates without change and re-issuance fees. This waiver policy applies to all booked tickets issued on or from 7 March until 31 March 2020.

The world’s biggest aircraft, the Airbus A380 superjumbo, may be the latest victim of the COVID-19 coronavirus.

Lufthansa Group is looking at temporarily grounding its entire Airbus A380 fleet of 14 aircraft as it reduces capacity by up to 50 percent in the coming weeks and there is speculation Qantas is looking at taking out up to half of its fleet of 12 superjumbos.

The problem for the big four-engine planes is that they are not as efficient as the smaller twins and their size makes filling them in the current circumstances much harder.

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Qantas has already accelerated heavy maintenance schedules for its aircraft and this should account for some of the superjumbos but it warned more changes were on the way even as it announced additional cuts on Friday.

Lufthansa’s surprise announcement that capacity would be cut by as much as half comes as airlines worldwide are continuing to see significant falls in passenger demand.

The German airline group said the exceptional circumstances had resulted in “a drastic decline in bookings as well as numerous flight cancelations”.

“Depending on the further development of demand, capacity is to be reduced by up to 50 percent in the coming weeks,’’ the airline said in a statement.

“These capacity adjustments apply to all passenger airlines in the Lufthansa Group.

“In addition, the extent to which the entire Airbus A380 fleet (14 aircraft) can be temporarily taken out of service in Frankfurt and Munich is currently being examined.

“This measure is designed to reduce the financial consequences of the slump in demand.”

The company said the latest reduction complemented planned savings in areas such as personnel, material costs and project budgets.

It has introduced a hiring freeze and offered employees what it termed “individual personnel measures”.

These included unpaid leave and bringing forward annual leave.

“The company is in talks with its operating partners and trade unions in order to avoid dismissals – among other measures – by means various part-time models, including probationary periods,’’ it said.

The group’s airlines — Lufthansa, SWISS, Australian Airlines, Brussels Airlines and Air Dolomiti — are also joining other carriers by introducing more flexible rebooking options.

Several US carriers, British Airways and Air New Zealand have adopted a similar strategy to allow customers some peace of mind in a situation where most travel insurance does not cover the coronavirus.

Until March 31, the airlines will waive the rebooking fees for all newly booked flights worldwide and offer a one-time rebooking – regardless of the original fare purchased.

This will allow passengers to rebook to a new travel date until 31 December 2020 without rebooking fees.

The waiver also applies for tickets bought before March 5 with a travel date up to April 30.

The departure and destination airports in both cases must be identical and if the original fare is no longer available, the corresponding difference must be paid.

The rebooking must also be made before the original travel date.

“With this new waiver policy, the Lufthansa Group Airlines are responding to the wish of many customers to help make their travel plans more flexible under the exceptional circumstances caused by the spread of the coronavirus,’’ the company said.