The Australian Securities Exchange privately questions Virgin Blue after it revealed a shocking profit downgrade in less than a month.

The ASX met with representatives of the discount airline on Friday and discussed the revise earnings that will be released soon once information became available to the public.

The airline's announcement of the downgrade, which was 75 per cent below the previous downgrade, did not match with the scheduled announcement.

A Virgin Blue spokeswoman, who confirmed the discussion with the ASX yesterday, said the two downgrades were due to the “radical decline in yields, even though it was a short period.”

"You've seen similar stats in the retail sector," she said.

Virgin's shares declined at 12 c, or 28 per cent, to 31c on Friday, which crossed out $287 million from its market capitalization, after it declared a dowgrade.

The company's pre-tax profit was declared on May 3, when it posted its market lower end for a range of $80 million to $110 million. Days later, former senior Qantas executive John Borghetti will replace Brett Godfrey as chief executive.

On Friday, the market was shocked when Mr. Borgetti cut off the revised guidance to a range of $20m-$40m, promting the ASX to make an inquiry to the company.

It was known that the recent weakening trend in the retail market and the unexpected slow down of consumer confidence were the root cause why its guidance was cut back.

Although it was concluded that Virgin Blue would reach a $100 million profits by tax and exceptional items, its average fares may fall by 10 per cent.

Analyst Cameron McDonald valued Virgin at 38 cents, and comments that Virgin's yield is expected to recover soon.

Virgin said it will continue to monitor the market conditions so it will be ready to adjust its capcity through lease returns.