UPDATE 3-Norwegian Air halts flights to Italy because of coronavirus

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OSLO, March 10 (Reuters) - Norwegian Air has temporarily halted flights to and from Italy because of the coronavirus outbreak, the budget carrier said on Tuesday, adding to the company's financial woes.

The whole of Italy has been placed under lockdown until next month in an attempt to beat the spread of the virus, the government announced on Monday.

"Due to quarantine restrictions that were recently imposed across Italy, Norwegian has decided to temporarily halt its flights," the airline said.

A flight from New York to Rome was canceled on Monday, Norwegian said, while flights between Oslo and Rome will similarly be called off on Tuesday.

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

In Norway, passenger air traffic abruptly fell by 5% in the final days of February, following the confirmation on Feb. 26 of the country's first coronavirus case, national airport operator Avinor said.

"We've seen a clear drop in traffic going into March, and we expect this to continue for as long as the coronavirus situation lasts," Avinor Chief Executive Dag Falk-Petersen said.

Britain's Flybe collapsed on March 5 as bookings faltered amid the virus outbreak, and a further shakeout in the industry is seen as likely, industry experts have warned.

A pioneer in low-cost transatlantic travel, Norwegian in recent years launched flights from the Italian capital to major U.S. cities such as Los Angeles and Boston, as well as New York.

On March 5, as the coronavirus outbreak escalated, the company said it would cancel 22 flights between Europe and the United States from March 28 to May 5.

Norwegian last week also canceled flights to and from the worst affected areas of northern Italy. (Reporting by Terje Solsvik; Editing by Jason Neely and Louise Heavens)