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Air New Zealand has cut capacity on flights to Australia by 7 per cent.Credit:AP

Air NZ in February predicted the COVID-19 hit to FY20 earnings would be in the range of $NZ35 million ($34 million) to $NZ75 million ($72 million) due to lower demand and capacity cuts.

The company on Monday said financial impact is now likely to be more significant than previously estimated.

"And with the situation evolving at such a rapid pace,the airline is not in a position to provide an earnings outlook to the market at this time,"Air New Zealand said in a release.

The company has already cut flights to Hong Kong,suspended Shanghai services until March,and Seoul flights from March to June.

Total capacity into Asia has been slashed by 26 per cent,and total overall network capacity cut by approximately 10 per cent since the outbreak of COVID-19 started. New Zealand's flag carrier cut capacity on flights to Australia by 7 per cent.

Qantas on Friday announced it would cut more international flights as it too grapples with falling demand.

Qantas'latest cuts to destinations including Tokyo,Sapporo,Osaka,Hong Kong and Auckland are on top of its grounding the equivalent of 18 planes as it cut international and domestic capacity last month.

Air NZ on Monday also announced chief executive Greg Foran has voluntarily offered to reduce his base pay of $NZ1.65 million by approximately 15 per cent,or $NZ250,000,with the support of the board.

Air NZ chief Greg Foran has voluntarily taken a 15 per cent pay cut as the financial impact of the coronavirus worsens.Credit:AP

Air NZ's executive team will also extend their salary freeze that has been in place since May 2019

First half profit fell by 33 per cent to $NZ101 million last month.

The carrier's ASX-listed share price has plunged more than 30 per cent so far in 2020. Air New Zealand shares slid 5 per cent on Monday to end the session at $1.88 against a broader market plunge of 7.3 per cent.

AAP