The economic impact of the US-Israeli conflict with Iran is starting to be felt by businesses in Australia and New Zealand, where rising fuel costs are driving up inflation and eroding consumer and business confidence.
Several businesses in Australia and New Zealand have reported significant repercussions.
Related ↗Toyoda wins shareholder approval to remain chairman and Kon takes over as CEO.New Zealand's Air NZ launches fresh route.
Forecasting a substantial annual pre-tax deficit, Air New Zealand's financial projections have taken a significant hit just over two months since revising their 2026 forecast downwards, due in part to the escalating Iran conflict driving up jet fuel prices and exacerbating existing challenges of dwindling demand and fleet limitations.
Read next ↗India's TCS to take $70 million hit after US Supreme Court rejects appealNew Zealand's national carrier, Air New Zealand, anticipates an annual pre-tax deficit ranging from $201.8 million to $231.5 million, reversing last year's NZ$189 million profit margin.
Air New Zealand issued a warning in early March that its annual profit forecast was uncertain, attributing increased airfare costs to fluctuations in global oil prices, specifically jet fuel.
New terminal facilities at Auckland International Airport.
Auckland International Airport in New Zealand reported disruptions to flights between Auckland and the Middle East region.
Air travel through Middle Eastern routes plummeted significantly in March, with a staggering 81% decrease in passengers and a corresponding 73% reduction in available seats from the previous year's figures.
A2 Milk, listed as ATM.NZ, launches a fresh initiative.
A2 Milk Company has revised its fiscal 2026 profit forecast downward, citing increased transportation expenses stemming from Middle East tensions and resulting supply chain interruptions affecting its flagship China-label infant formula sales in New Zealand's key export market.
Australian companies like Cleanaway Waste Management are impacted.
Australian companies are facing financial setbacks due to the Middle East conflict, with one business adjusting its earnings forecast downward by approximately $14.17 million.
Cochlear, listed on the ASX.
Cochlear's 2026 profit projection has been adjusted downward due to sluggish sales in established economies, where surgery rates and hearing aid recommendations are declining.
Middle East hostilities have introduced fresh challenges for companies, including heightened concerns about cancelled orders, delayed deliveries, and increased risk to their receivable income.
New Zealand's Fletcher Building launches operations.
Fletcher Building in New Zealand is vulnerable to the ripple effects of the Middle East conflict through its complex network of suppliers, transportation routes, and fluctuating energy expenses.
Businesses in Australia and New Zealand are bracing for increased costs as a result of the Middle East conflict. This will lead to higher prices across various sectors, with plastics experiencing the most significant increases of up to 36%. Other divisions can expect price rises between 1% and 5%.
Australian travel agency FLT.AX expands operations.
Flight Centre Travel's profit projection for 2026 has been revised downward due to a significant impact on global leisure travel resulting from the Middle East conflict in the Gulf region.
The company's revised forecast indicates an expected range of A$275 million to A$295 million in underlying profit before tax by June 30, a decrease from its initial projection of A$310 million to A$345 million.
In a revised assessment, the company now estimates that its leisure segment has been impacted by approximately A$40 million more than initially forecasted in April.
New Zealand-based Fonterra, listed as FCG.NZ
Fonterra, a major New Zealand dairy producer, is currently facing disruptions in its supply chain due to the ongoing conflict in the Middle East. This development may lead to increased inventory levels and expenses for the company by the end of the second half of the year.
Australia's National Australia Bank launches a new branch.
The National Australia Bank anticipates a significant financial hit in the first half of fiscal 2026, totaling A$706 million or approximately $504.44 million.
The NAB expects its common equity tier 1 capital ratio to decline by approximately 20 basis points as of March 31 due to interest-rate fluctuations, a weaker New Zealand dollar and increased provisioning.
The company plans to implement a 1.5% reduction in the first-half dividend reinvestment plan, potentially generating up to A$1.8 billion for its financial reserves.
Australian packaging company Orora, listed on the ASX as ORA.AX.
Orora has downgraded its earnings projection for Saverglass, a packaging subsidiary in France, due to the ongoing conflict's economic repercussions.
Bottle manufacturing has been halted at the firm's glass production plant in Ras al Khaimah, United Arab Emirates, as a result of disrupted sea transport links.
Australian airline Qantas operates.
Australia's flagship airline Qantas Airways is now anticipating a significant increase in fuel costs, pegged at up to A$800 million for the remainder of the year, due to soaring and unpredictable jet fuel prices. The airline has also put its planned share buyback on hold, worth A$150 million.
Qantas is adjusting its pricing strategy to mitigate increasing expenses, with fare hikes and a shift towards destinations like Paris and Rome, which continue to exhibit robust demand. Domestic flights will be scaled back by approximately 5% during the June quarter.
Australian company Qube Holdings, listed as QUB.AX, initiates a new venture.
The Middle East conflict is projected to have a significant financial impact on Qube's earnings, estimated at between A$10 million and A$20 million in fiscal 2026.
The logistics company suggests that the current situation may actually stimulate a surge in investments into innovative renewable energy initiatives, potentially benefiting their operations.
Virgin Australia, listed as VGN.AX on stock exchanges.
Fuel price hikes are expected to significantly impact Virgin Australia's bottom line, with estimated additional expenses ranging from AU$30 million to AU$40 million for the latter half of FY2026.
In mid-March, an airline announced adjustments to its fare structure due to escalating expenses within the aviation industry, worsened by the ongoing conflict in the Middle East.
Australian bank Westpac has launched a new service.
Australia's second-largest bank by assets, Westpac, is already feeling the pinch from Middle East tensions, with energy market disruptions causing profit concerns for the first six months of its fiscal year ending March 31, leading to higher credit provisioning.
The Middle East conflict has led to increased interest-rate volatility, negatively impacting Westpac's treasury and markets division, where net interest margins have been compromised.
The bank's provision for potential bad debt has reached a new peak following the pandemic's impact.
Australian supermarket giant Woolworths has launched a new initiative.
Australian supermarket leader Woolworths notes that the ongoing Middle East crisis has introduced substantial unpredictability for both its customers and supply chain partners.
Due to escalating fuel costs and significant investments in customer retention, the company now expects domestic food segment earnings for fiscal 2026 to fall short of its previously projected upper limit.
Australian retailers are responding to rising costs by implementing price freezes: Woolworths has pledged to maintain stable prices for 300 essential items through August.
Worley, listed as WOR.AX, launches a fresh initiative.
The Middle East conflict's ripple effects are expected to significantly dent Worley's bottom line, with a projected financial hit of between A$30 million and A$40 million on its EBITA for fiscal 2026.
Australian engineering firms are bracing for a challenging financial year ahead, with one company predicting stagnant earnings before interest, taxes and amortization by 2026.
The exchange rate is set at 1.3996 AUD per USD.
The exchange rate stands at 1.6852 NZD per USD.
Earlier in March, Air NZ a warning in early March that its annual profit forecast was uncertain, attributing increased airfare costs to fluctuations in global oil prices, specifically jet fuel.
Auckland International Airport(AIA.NZ)at Auckland International:
A2 Milk,(ATM.NZ)as ATM.NZ, launches a fresh:
Cleanaway Waste Management(CWY.AX)Cleanaway Waste Management are:
Fletcher Building(FBU.NZ)Fletcher Building launches:
Flight Centre Travel(FLT.AX)FLT.AX expands:
Fonterra(FCG.NZ)Fonterra, listed as:
National Australia Bank(NAB.AX)Bank launches a new:
Orora(ORA.AX)company Orora, listed on the ASX as:
Qantas(QAN.AX)Qantas:
Qube Holdings(QUB.AX)Holdings, listed as QUB.AX, initiates a new:
Virgin Australia price hikes are expected to significantly impact Virgin Australia's bottom line, with estimated additional expenses ranging from AU$30 million to AU$40 million for the latter half of FY2026.
Westpac(WBC.AX)Westpac has launched a new:
Australia's second-largest bank by assets, Westpac,is already feeling the pinch from Middle East tensions, with energy market disruptions causing profit concerns for the first six months of its fiscal year ending March 31, leading to higher credit provisioning.
Woolworths(WOW.AX)giant Woolworths has launched a new:
