Virgin Blue shares dropped nearly 22 per cent on Monday after Australia’s second-largest airline warned full-year profits would nearly halve and the group’s largest shareholder abandoned an attempt to sell down its stake.

Goldman Sachs JB Were was appointed in February to undertake a strategic review after Virgin Blue received a number of expressions of interest. Toll Holdings, the Australian logistics group which owns 62.8 per cent of Virgin Blue, has been attempting to cut its holding. However, Toll said that what interest it had received failed to “accurately reflect the underlying value” of the business.