Image copyright Norwegian

Norwegian Air is set to cancel 4,000 flights and temporarily lay off about half of its staff because of the coronavirus outbreak.

The budget airline said the changes would apply until the end of May and numbers may increase.

Its boss said new restrictions on travel between the US and mainland Europe put "extra pressure on an already difficult situation".

Analysts say airlines have been dealt another "body blow" by the travel ban.

Jacob Schram, chief executive of Norwegian, said this was "an unprecedented situation".

He called on "international governments to act now to ensure that the aviation industry can protect jobs and continue to be a vital part of the global economic recovery".

The airline has decided to ground 40% of its long-haul fleet and cancel up to a quarter of its short-haul flights.

The company, which is looking for a cash injection, employs 1,200 people in UK.

But all routes between London Gatwick and the US will continue to operate as normal.

Economic hit for airlines

The airline industry is already facing an economic hit of $113bn (£88bn) from the effects of the outbreak on passenger numbers.

Analysts predict this financial loss could grow substantially from the new travel ban.

There are fears that some weaker airlines could go bust.

On Wednesday, US President Donald Trump announced sweeping travel restrictions on 26 European countries in an attempt to combat the spread of coronavirus.

The ban applies to travellers from countries that are members of the Schengen border-free travel area.

The UK, Ireland and other non-Schengen countries are unaffected. US citizens are also exempt.

"It is another body blow for many airlines in need of central government support in these incredibly difficult times," said John Grant from global travel data firm OAG.

"It is just a decision that hurts the industry and the wider economy as travel and trade will be frustrated," he said.

Many airlines are already under the cosh from the effects of coronavirus, and thousands of flights have been cancelled worldwide.

Korean Air has warned that the coronavirus impact could threaten its survival, and UK airline Flybe, which was already struggling, collapsed last week, saying the coronavirus outbreak was partly to blame.

'Cash is king'

Airlines around the world are now assessing the impact of Mr Trump's surprise 30-day ban and how it will affect revenues.

Analysts predict some airlines could fall into administration.

There are nearly 400 daily flights from Europe to the US, according to FlightAware, a flight-tracking service.

"In a crisis like this, cash is king," said Michael Duff, managing director of The Airline Analyst.

He said transatlantic routes tended to be dominated by the major airlines, who should get through the crisis, assuming it lasts three to six months.

"Secondary players and regional and national European carriers are definitely facing severe survivability risk," he added.

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Association of Flight Attendants-CWA President Sarah Nelson called the ban "irresponsible".

"There is no explanation for how this will help fight the spread of the virus," she said. "It makes little sense when the virus is already in the US."

"Without any consultation with the industry, we don't even know what this means," she added.

The Association of Asia Pacific Airlines (AAPA) urged governments to refrain from introducing travel restrictions.

"Travel restrictions cause significant disruptions to supply chains, commerce, trade and most importantly to peoples' livelihoods due to the severe economic impact," said Andrew Herdman, AAPA director general.