Air New Zealand has scrapped its financial forecasts for the current year because of the uncertainty caused by the Covid-19 virus, as it cuts more services, froze hiring and its chief executive took a pay cut.

Photo: Supplied / Air NZ / Bruce Jarvis

Last month it cut its forecast of underlying earnings to between $300 million to $350 million from $350m to $450m, estimating that the virus might cost it as much as $75m.

But chief executive Greg Foran said the airline was now facing an unprecedented situation and it is difficult to predict future demand.

"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 the airline would make further cuts to services, mainly in Asia where it's suspending flights to China until the end of April, while it will rejig its trans-Tasman services, and reduce Pacific and domestic flights.

Capacity into Asia has been cut by 26 percent, and the overall number of seats across the network will be about 10 percent lower.

Air New Zealand would also cut costs, with a freeze on hiring, voluntary unpaid lead for operational staff, and cutting non-urgent spending.

Foran, who only started in February, said he would take a voluntary 15 percent cut in his base salary of $1.65m, worth about $250,000, while a pay freeze for senior staff would be extended.

"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.

"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," he said.