EasyJet said it would lay off its 4,000 UK-based cabin crew for two months, meaning they won't work from April 1 but will get 80% of their average pay under a state job retention scheme.
The global health crisis has brought European air travel to a standstill. Small British airline Loganair said on Monday it would seek state aid while Richard Branson's Virgin Atlantic has asked for emergency help, a source told Reuters.
Shares in easyJet lost as much as 10% in early trading on Monday, having halved in value over the last month. The airline now has a market capitalisation of about 2.3 billion pounds ($2.9 billion). Its shares were down 8% at 1145 GMT.
"We think the group has enough liquidity to manage a short suspension of European air travel but if the disruption proves prolonged, or the recovery is sluggish, easyJet could be in real trouble," said Hargreaves Landsdown analyst William Ryder.
EasyJet was also under pressure from its founder, Stelios Haji-Ioannou, who asked in a letter on Sunday for it to cancel or renegotiate a 4.5 billion pound order for 107 Airbus planes because the extra aircraft would destroy shareholder value.
Haji-Ioannou, who along with his family owns about a third of easyJet's shares, has been a long-time critic of the airline's plans, saying it was putting expansion before profit growth.
EasyJet said it was trying to reduce payments, including those on aircraft, and would respond to the letter privately. It has said many times that its arrangement with Airbus gives it a great deal of flexibility.
Airbus played down any possibility of cancelling the easyJet contract. "Any order that appears on our table is audited and is firm," an Airbus spokesman said.
Industry sources, however, said there were likely to be talks with easyJet and other airlines about delaying deliveries.
EasyJet said it was focused on short-term liquidity - including removing costs from the business and working with suppliers to defer and reduce payments - and was also in talks with UK pilots union BALPA over a potential deal.
"We are working tirelessly to ensure that easyJet continues to be well positioned to overcome the challenges of coronavirus," easyJet CEO Johan Lundgren said in a statement.
Haji-Ioannou has told the airline to try to raise money from shareholders, and offered to participate himself.
Some UK airlines had been hoping for a specific state aid package but the government said last week it would only consider stepping in on an individual basis once carriers had exhausted all options, such as raising capital from existing investors.
Virgin Atlantic has asked the government for emergency financial help, a source told Reuters on Monday. It was not clear if this would be in the shape of commercial loans or guarantees, or the government taking a stake.
Virgin is 51% owned by billionaire Richard Branson's Virgin group and 49% by U.S. airline Delta. Delta might prefer not to invest more in Virgin now, given that it is in line for U.S. grants as part of a relief package there.
EasyJet said it had no plans to ask for any bespoke state support and was focused on using government measures already announced. British Airways-owner IAG said in a statement it had extended a revolving credit facility and was looking at measures to improve its cash flow and liquidity.
EasyJet's management could face disruption if it does not address Haji-Ioannou's worries over the Airbus order, which is due to be paid between 2020 and 2023, as he has threatened rolling general meetings to try to remove board members.
By Sarah Young