WRAPUP 1-Airlines strive to stave off calamity as coronavirus locks down Italy

* Slew of carriers cancel flights to and from Italy

* Korean Air warns epidemic could threaten its survival

* Australia's Qantas cuts capacity, delays plane orders

* HNA Group, investor in China carriers, in 'state of war'

By Hyunjoo Jin and Jamie Freed

SEOUL/SYDNEY, March 10 (Reuters) - Airlines around the world
sank deeper into crisis on Tuesday as the worsening coronavirus
epidemic and Italy's lockdown hammered passenger numbers, forced
the cancellation of thousands of flights and led to the delaying
of plane orders.

Some carriers face calamity, with Korean Air Lines
warning the virus outbreak could threaten its
survival after it scrapped more than 80% of its international
capacity, grounding 100 of its 145 passenger aircraft.

"The situation can get worse at any time and we cannot even
predict how long it will last," Woo Kee-hong, the president of
South Korea's biggest airline said in a memo to staff that
summed up the turmoil facing the industry.

"But if the situation continues for a longer period, we may
reach the threshold where we cannot guarantee the company's
survival."

Australia's Qantas Airways said it would also cut
its international capacity, by nearly 25% over the next six
months, and delay an order for Airbus A350 planes due
to a plunge in demand that industry chiefs estimate could hit
airlines' revenue by up to $113 billion this year.

Qantas said it could no longer provide guidance on the
financial impact of the coronavirus, which it had estimated on
Feb. 20 could hit underlying earnings (EBIT) by up to about $98
million this financial year. Its CEO and chairman will take no
salary, managers will receive no bonuses and all staff are being
encouraged to take paid or unpaid leave.

ITALIAN LOCKDOWN

The unprecedented lockdown of the whole of Italy, which is
convulsed by Europe's worst coronavirus outbreak, has heaped
fresh disaster on global airlines.

Norwegian Air, IAG-owned British Airways,
Ryanair easyJet, Wizz Air and El Al
Israel Airlines were among carriers to axe flights to
and from the country, where there have been more than 9,000
virus infections and over 460 deaths.

Aviation analyst Mark Simpson, at Goodbody, said another
major concern for the travel industry was whether the
coronavirus epidemic would worsen markedly in European holiday
hub Spain, which has reported more than 1,200 cases.

"A similar outbreak in Spain would pull IAG into the fold,
the holiday groups like TUI and DART (Jet2)," he said. "IAG
would be much more exposed due to its ownership of Vueling,
Iberia and the soon to be completed Air Europa."

Air France said it expected to make a total of
3,600 flight cancellations in March, including cutting 25% of
its European capacity.

NEAR-EMPTY PLANES

The global airline industry has been among the sectors
hardest hit by the coronavirus outbreak. It has lost almost a
third of its value - $70 billion - this year, according to
Reuters calculations based on the 20 top global carriers.

The Italian cancellations added to an already difficult
financial situation at Norwegian Air, which last week scrapped
its 2020 outlook and has lost 70% of its market value this year.

The CEO of Britain's Virgin Atlantic, Shai Weiss, meanwhile
told the BBC that the airline was being "forced to fly almost
empty planes" in order to keep its valuable airport slots.

Industry pressure is mounting on European authorities to
waive a rule requiring airlines to run 80% of scheduled services
or else forfeit unused take-off and landing slots, amid concern
it is inducing some carriers to run empty "ghost flights".

Should Korean Air fall, it would not be the first airline
engulfed by the fallout of the outbreak; Britain's Flybe
collapsed last week as bookings faltered, and a further shakeout
in the industry is seen as likely, industry experts have warned.

Conglomerate HNA Group, which owns or holds stakes in a
number of Chinese carriers, including Hainan Airlines
, said it was in a "state of war" in its efforts to
tackle the financial fallout of the outbreak.

Airlines in China, where the new coronavirus originated,
have cancelled tens of thousands of flights since the start of
the outbreak, though have started resuming them as the spread of
the virus has slowed on the mainland.

($1 = 1.5246 Australian dollars)
(Reporting by Hyunjoo Jin in Seoul and Jamie Freed in Sydney;
Additional reporting by Terje Solsvik in Oslo, Laurence Frost in
Paris, Stella Qiu and Brenda Goh in Beijing, Angel Krasimirov,
Tova Cohen in Tel Aviv, and Sarah Young, Kate Holton and
JOsephine Mason in London
Writing by Pravin Char; Editing by Mark Potter)