Virgin Blue’s shock profit warning last Friday has been attributed to many things: a slowing economy, a weakening retail environment as interest rates rise, excessive price competition, too much industry capacity and so on. Virgin Blue maintains that there has been a "rapid deterioration" in the operating environment in the short three weeks since the company's previous guidance. This is remarkable. In other words, the deterioration is sufficient to reduce two month (May/Jun-2010) income by AUD40-60 million. But fundamentally, Virgin Blue’s aspirational New World Carrier strategy is clearly failing to wrest business travel away from the Qantas Group, leaving Virgin Blue at the bloody low-end of the market.