Virgin Australia Has Issued A Surprise Profit Warning

Virgin Australia CEO John Borghetti and Sir Richard Branson share a light hearted moment after holding a press conference at Perth Airport on May 7, 2013 in Perth. Photo: Getty/Paul Kane

Earnings will fall this year, Virgin Australia has warned, with difficult trading conditions making it unlikely third quarter costs will be recovered.

The airline, which last traded at 46 cents warned the market full-year profit-before-tax would be lower than its $82.5 million result in 2012.

In February Virgin Australia boss John Borghetti said the airline’s profit would be up this year.

Getty/Paul Kane

He also said Virgin would — for the first time in five years — make a profit in the second half of 2013.

Virgin is still predicting it will record a before-tax profit for the fourth quarter.

“Virgin Australia is focussed on its strategy of maintaining yield improvement, with the second month of consecutive yield growth, and strong cost controls in place,” it said in a statement to the Australia Securities Exchange.

Slower trading conditions, increased competition and a “weakening economic environment” prevented the airline from providing any further profit guidance for full-year 2013.

One to watch at the open today …

Now read: No Such Thing As A Nine-To-Five For Virgin Executives

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