Virgin Australia confirmed it would post a pre-tax loss of A$49 million for the last six months of 2013.
The update to investors was prompted by a regulator probe into unusual share trading over the past week.
Shares in the airline fell 20% – from A$0.35 on Monday to A$0.28 two days later – prompting the ASX stock exchange in Australia to send a “price query letter” to question the reasons behind the volatility, the Financial Times reported.
“Virgin Australia is not aware of any information concerning it, that has not been announced to the market, which could explain the recent trading in Virgin Australia securities,” the airline said.
Virgin Australia said that it expected to report a pre-tax loss of A$49 million for the half year to December 31 – in line with analyst’s expectations.
It said this would exclude its share of losses attributed to Tigerair Australia, the low-cost carrier in which Virgin Australia owns a 60% stake.
Virgin Australia blamed the share sell-off on factors including the recent volatility in world markets, which it said may have had an impact on local markets and a selling down of cyclical stocks.
The announcement came as it was revealed that separate company Virgin Atlantic is to cut its Sydney to Hong Kong service.
“We have received feedback that this has caused some confusion in the market with people mistakenly assuming that Virgin Atlantic is the same entity as VAH [Virgin Australia Holdings],” Virgin Australia said.
Qantas in December blamed unfair competition from Virgin Australia on domestic routes for an expected loss of up to A$300 million in the second half of 2013 against a profit of A$223 million in the same period in 2012.
Qantas revealed a A$2 billion programme of cuts to reassure investors.