UPDATE 2-Ryanair to cut Italy flights by 25% due to coronavirus

* Italy is Ryanair's largest market

* Sees no impact on 2020 profits

* Warns of airline failures in Europe
(Adds share price, analyst quote)

By Conor Humphries

DUBLIN, March 2 (Reuters) - Ryanair will cut
capacity in and out of Italy, its largest market, by 25% for
three weeks due to a significant drop off in bookings since a
coronavirus outbreak, Europe's biggest low-cost airline said on
Monday.

The Irish airline said it did not expect the cancellations
to have a material impact in its current financial year, which
ends on March 31, and said it was "far too early to speculate"
on the impact of the virus on next year's results.

Rivals including British Airways, easyJet
and Wizz have already announced cancellations in the
wake of disruption from the outbreak, which emerged in China in
late December and has spread to more than 50 countries.

"We will make sensible cuts to our schedules over the
comings weeks to reflect weaker bookings and changing travel
patterns," Chief Executive Michael O'Leary said. "This is a time
for calm."

The virus is likely, however, to result in the failure of
more European airlines in the coming weeks, he said.

There have been a string of European airline collapses since
2017 that have left thousands of passengers stranded and had a
knock-on effect on related industries such as hospitality.

Ryanair said it had notified passengers that it was reducing
capacity in Italy by up to 25% for a three-week period from
March 17 to April 8, saying there had been a significant drop in
bookings during the past week for that period and a "significant
step up" passenger no-shows, particularly from and within Italy.

Ryanair's European shares ended trading on Monday down 5% at
11.4 euros, or a drop of 29% from their 2020 peak of 16.07 euros
hit on Jan. 10.

Analysts said they expected Ryanair to hit its target for
profit in the current financial year of between 950 million and
1.05 billion euros but all bets were off thereafter because of
the coronavirus.

"I heard from another airline that January was very good so
they (Ryanair) obviously have enough in the bank to make the
range," for full-year profit, said Goodbody analyst Mark
Simpson, who described the cuts as "sensible."

"Of course, its academic. No one knows how the spring will
shape up for the next fiscal year."
(Reporting by Conor Humphries; editing by David Evans, Jane
Merriman and David Clarke)