Nov. 28 (Bloomberg) -- Virgin Blue Holdings Ltd.'s pretax profit will be cut by A$200 million ($131 million) after Australia's second-biggest airline, made wrong-way bets on moves in fuel prices and currency rates.

The airline will book the price of hedge positions at market levels and take a pretax charge, Neil Chatfield, the carrier's chairman said in an address to shareholders today in Brisbane.

Virgin Blue follows China Eastern Airlines Corp., Air China Ltd. and Cathay Pacific Airways Ltd. in posting losses from hedging after the price of jet-fuel plunged 61 percent from a record high in July. China Eastern's losses from wrong-way bets on fuel costs jumped sixfold last month.

Airlines have lost money after jet-fuel prices plunged, leaving them with contracts to buy fuel for more than market rates. Jet-fuel prices closed at $70.25 a barrel in Singapore trading yesterday, compared with a $181.85 record in July.

``The global financial crisis and the impact on consumer confidence will combine to overtake fuel as the biggest issue for our industry in the next 12 to 24 months,'' Chatfield said, according to a prepared text of the speech.

A report earlier this week showed confidence among consumers in the U.S., the world's largest economy, fell to the lowest since 1980 in November.

The company's shares rose 1.6 percent to A$0.315 in Australian trading. They have dropped 85 percent this year.

To contact the reporter on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net

Last Updated: November 27, 2008 23:22 EST