Virgin Blue has issued a profit downgrade, saying the impacts of the Queensland floods and a slowdown in consumer spending could lop up to $40 million off its revenue for the current financial year.
“The slowdown in consumer spending experienced across the discretionary retail and leisure sector, together with the recent floods in the eastern states, could have a significant impact on trading conditions over the coming months,” the airline reported to the ASX on January 25. “The extent of this impact on revenue cannot be accurately estimated at this time but could be up to $40 million.”
The airline, which is due to report its half yearly results on February 23, says it expects to post an underlying net profit before tax for the six month period of $70-75 million. After the crippling outage of its Open Skies reservation system in September, and “the non-cash impact of ineffective hedges”, net profit after tax for the half is expected to be in the $23-26 million range.