Virgin Blue Holdings Ltd has lowered its earnings guidance by up to 75% for the full year. The airline said that it is lowering its guidance as it recorded a sharp drop in leisure travel. This was reported the second profit downgrade in this month by Virgin. The shares of the airline fell sharply after the announcement of lowering the guidance by the company.

Virgin Blue said today in a statement to the Australian Securities Exchange that it now expects its annual pretax profit in a range of $A20 million to $A40 million despite the recent guidance of $A80 million for the full year 2010.

The airline said that it had continued to see rapid deterioration and increased volatility in the operating environment since its last guidance earlier this month. Virgin said that the deterioration was registered particularly in the leisure segment both domestically and internationally.

The company also blamed the weakening trend in the broader retail market and the recent decline in consumer confidence for lowering the guidance. Virgin also warned today that the average fares could drop by 10% than expected earlier this quarter.

The shares of Virgin fell sharply on the news today. The shares closed today at 31 cents, declining by 28% from the previous closing, after making a low of 30 cents.