Virgin Australia sees lower-than-expected profit as demand falls

Virgin Australia’s full-year profit may be less than half that expected by analysts amid capacity cuts and weak travel demand. The Australian carrier said Monday that underlying pretax profit in the year ending June 2016 will be between A$30m and A$60m. Virgin faces a “challenging operating environment,” CEO John Borghetti said. He cited “weak consumer demand” and uncertainty surrounding Australia’s upcoming July election and the country’s resources downturn. The lower-than-expected earnings follow upheaval among the airline’s three biggest shareholders. Air New Zealand, the biggest investor, said in March it may sell its shares, fueling speculation that Singapore Airlines may increase its own stake to prevent an unwelcome foreign airline muscling in.<br/>