Flight Centre has had a massive $600 million wiped off its market value after the travel company issued its second profit warning in six months.
Weaker spending on holidays and competition for business travellers are weighing on the global booking agency.
The company is also facing major shifts in the travel industry thanks to online giant Expedia and a growing number of aggregator sites, with analysts questioning if Flight Centre can respond to the challenge.
Investors punished the company, wiping $595 million from its market value as its shares plunged 13 per cent.
In a warning issued a week before the end of the financial year, Flight Centre said sales growth in its Australian operations, the largest part of its business, remains much slower than normal.
A rebound in holiday travel demand has not been reflected in the company's sales, while competitive pricing in the corporate travel market is also a factor, Flight Centre said.
Official figures released on Tuesday show a record number of Australians went overseas in March, almost 800,000, a sharp increase on the first two months of 2015.
"Our international businesses will deliver solid profit growth, but the Australian business will not achieve its normal growth trajectory," managing director Graham Turner said.
Flight Centre expects a pre-tax underlying profit of between $355 million and $365 million in the year to June 30, down from the $360 million to $390 million it forecast when it last made a downgrade in December.
A $355 million underlying profit would be a fall of six per cent from the previous year's record result.
Flight Centre shares were up as much as 2.7 per cent on Tuesday before the downgrade was issued to the market, and they quickly nosedived.
The shares ended the day $5.90 weaker at $37.51.
IG market strategist Evan Lucas said multiple profit warnings in one year always sent shockwaves through the market.
"When investors see dual downgrades then they start to really doubt the stock and that's partly why you've seen this reaction today," he said.
Flight Centre's warning also highlighted longer-term challenges for the company, he said.
It said it expects outbound travel to boom in the years ahead, and also re-iterated a focus on improving customer service and a desire to offer exclusive travel products and benefits.
"What they're effectively saying is that they are very much beholden to market conditions and there's not much they can do about it until conditions improve," Mr Lucas said.
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