Australia's Virgin Blue warns of full-year loss, shares slump

13:25, March 23, 2011      

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Shares in Virgin Blue Holding Ltd, Australia's second-largest airline slumped more than 7 percent on Wednesday after it warned it would suffer a pre-tax loss of up to 80 million AU dollars (80.67 million U.S. dollars) in 2011 due to soaring fuel prices, the earthquake in New Zealand and floods in Australia's Queensland.

The airline group, comprising Virgin Blue, Polynesian Blue, Pacific Blue and V Australia, said on Wednesday it expected to post a full year before tax loss in a range between 30 million AU dollars to 80 million AU dollars.

At 1015 local time on Wednesday, Virgin Blue was down 2.5 AU cents, or 7.58 percent, at 30.5 AU cents, the lowest since August 26, 2010.

In Wednesday's statement, Virgin Blue Group of Airlines Chief Executive Officer and Managing Director, John Borghetti said, "We have witnessed an unprecedented number of significant events in an extraordinarily short period of time, including natural disasters and a sharp spike in fuel prices."

"These events have severely impacted consumer confidence, resulting in a slower than usual recovery in tourism," Broghetti said.

Virgin Blue said soaring jet fuel prices had added an extra 50 million AU dollars to its fuel costs for the second half of the 2011 financial year.

The airline also estimated the impact of the Christchurch earthquake at 15 million AU dollars, on top of a 50 million AU dollars hit form the Queensland floods and Cyclone Yasi.

Source: Xinhua
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