Depressed consumer spending and the impact of flooding in eastern Australia will see profits fall at Virgin Blue the airline said in a statement.
Australia’s second-largest airline said it expected half-year net profit to fall to A$23 million to A$26 million.
This is compared to a net profit in the same period a year earlier of A$62.5 million.
“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,” added Virgin Blue in a statement.
“The extent of this impact on revenue cannot be accurately estimated at this time, but could be up to $40 million.
Virgin added further update will be provided at the half year results on February 23rd.
Flooding in Queensland disrupted operational and administrative activities earlier this month while Virgin Blue was also forced to evacuate its Brisbane headquarters.
The airline also reiterated advice provided in October that the outage of its Navitaire reservations, check-in and operating systems between September 26th and October 6th would shave $15 million to $20 million off its estimated pre-tax profit.
“Negotiations are continuing with Navitaire for recovery of the loss suffered,” added a statement.
Virgin Blue was also in the headlines recently following the confirmation of a link up with Air New Zealand.