Air Kiribati says a lack of revenue has forced it to prepare to cut staff and contract out some services.
In accordance with employment obligations, the airline has given its staff 30 days notice of its downsizing plans.
The airline's Acting Chief Executive officer Denise Ratieta says an audit last year by the Centre for Asia Pacific Aviation convinced them of the need to cut back staff.
"If there are services to be contracted out I suppose it will be downsized to about fifty percent. Most of the cuts will be from the support staff - Accounts and Admin - I suppose, at this time. But also there's a little bit of a cut that will be from the operation, especially among the porters."
Denise Ratieta says, despite the staff cuts the airline, which has only two planes, is looking at purchasing a bigger aircraft to bolster its fleet.