To avoid layoffs after slashing capacity by as much as 50 per cent,the airline is examining the implementation of so-called"short-time work",the company said on Sunday.
The program – known as"Kurzarbeit"in German – involves the government offsetting wages lost when companies are forced to temporarily halt work.
With some countries restricting flights from Germany,which has more than 800 cases,"the impact on our booking situation is immense,"chief executive officer Carsten Spohr said in an internal memo to employees.
"We must assume that it may take months before we will see first signs of stability."
Italy's decision to restrict movement for a quarter of its population comes on top of the cancellation of large events such as the Geneva Motor Show and the ITB tourism fair in Berlin. The International Air Transport Association estimated carriers may lose as much as $US113 billion in ticket sales this year.
Virgin Australia – Australia's second-largest airline –estimates the coronavirus will slash earnings by up to $75 million in the six months ending June 30. Chief executive Paul Scurrah will ask the federal government to rein in fees at the country's major airports as the fallout from the virus hits.
British regional airline Flybewas last week on the brink of collapse. The carrier – already struggling before the coronavirus outbreak – has been plunged into fresh crisis as travel demand plummets.