Australia's Virgin Blue flags additional capacity cuts

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Australian carrier Virgin Blue plans to cut capacity next fiscal year further than originally planned.

Virgin Blue CEO, Brett Godfrey, told delegates at an investment conference in Sydney that the original plan called for a capacity cut of 2.4% next fiscal year but it will probably have to be revised upwards to 5.5%.

He says capacity needs to be cut further because passenger demand is still weak. Virgin Blue's fiscal year starts 1 July.

Virgin Blue has already cut capacity by grounding seven Boeing 737s.