UPDATE 1-Air Canada withdraws forecasts due to coronavirus outbreak; shares dive

(Adds context, additional comment from release)

March 16 (Reuters) - Air Canada said on Monday it was withdrawing its first-quarter and full-year financial forecasts for 2020 as well as its full-year forecast for 2021, as the coronavirus pandemic sharply decreases travel demand.

Air Canada shares were down more than 20% in midday trading as the country’s largest carrier said system capacity during the second quarter in available seat miles (ASM) would decline by about 50% on an annual basis.

Airlines are asking for help from governments as they reel from a plunge in bookings and traffic, with the fast-spreading coronavirus pandemic generating travel restrictions and event cancellations around the world.

“The crisis facing our industry is worsening as countries around the world adopt increasingly severe measures, national lockdowns and travel restrictions,” Air Canada Chief Executive Officer Calin Rovinescu said in a statement.

“We understand that the governments of the United States and many European countries such as Germany, France, Italy, Norway and others have approved or are considering assistance for their airline industries in one form or another. Under these circumstances, we believe that the Canadian airline industry should also see similar assistance,” he said.

The Canadian government is mulling a multibillion-dollar package for industries most hit by the outbreak, including airlines. (Reporting by Allison Lampert in Montreal and Ankit Ajmera in Bengaluru; Editing by Maju Samuel and Paul Simao)