Companies in Australia and New Zealand are increasingly reporting tangible financial effects from the U.S.-Israeli war on Iran, as higher fuel and freight costs feed inflation, sap consumer and business confidence and pressure corporate earnings. The disturbance in energy and shipping markets is prompting a mix of price rises, capacity changes and profit forecast revisions across transport, banking, retail, construction and manufacturing sectors.
Airlines and airports
Air New Zealand suspended guidance for full-year earnings in early March and announced fare increases tied to volatility in jet fuel markets - positioning itself among the earliest carriers to lift ticket prices in response to higher fuel costs. On April 7 the carrier said it would cut flights through May and June, reducing about 4% of scheduled services and impacting roughly 1% of total passengers.
Auckland International Airport reported sharp declines on routes to the Middle East, saying that in March passenger volumes on those services fell 81% year-on-year while seat capacity declined 73% versus the same month a year earlier. The airport described those disruptions as direct effects of the conflict.
Qantas Airways raised its fuel cost outlook for the second half of the year by as much as A$800 million, and indicated it had not commenced a planned A$150 million share buyback because of sharply higher and more volatile jet fuel prices. To offset higher costs the airline is increasing fares on some services, putting more focus on routes such as Paris and Rome where demand remains firmer, and trimming domestic capacity by about 5 percentage points in the June quarter.
Virgin Australia also warned of a significant uptick in fuel expenses, estimating an additional A$30 million to A$40 million in costs for the second half of fiscal 2026. The carrier said in mid-March it had adjusted fares to respond to rising aviation costs that have been "exacerbated by the situation in the Middle East."
Logistics, ports and forwarders
Qube Holdings has flagged an expected EBITA impact of around A$10 million to A$20 million for fiscal 2026 as a result of the conflict. The logistics group also noted that recent events could accelerate investment in alternative energy projects, which it said could be beneficial for the company, though it did not quantify potential gains.
Orora, a packaging business, trimmed its annual earnings forecast for its French unit Saverglass and suspended its share buyback programme, attributing the changes to the fallout from the conflict. The company has also halted bottle production at its glass plant in Ras al Khaimah in the United Arab Emirates because of closed shipping routes.
Fonterra, the New Zealand dairy cooperative, said supply-chain disruption related to the conflict is affecting operations and could raise inventory levels and associated costs in the second half of the year, while contributing to volatility in global commodity prices.
Manufacturing, construction and materials
Fletcher Building of New Zealand said it faces indirect exposures through supply chains, freight routes and energy costs, which together could affect construction demand in Australasia. The construction materials group said it plans to pass through increased costs to customers, with price rises across its divisions. Plastics, which the company identified as immediately exposed, will see increases of up to 36%, while other business units will face price rises in the 1% to 5% range.
Worley, the Australian engineering firm, estimated an adverse impact on underlying EBITA for fiscal 2026 of A$30 million to A$40 million. The company warned it was unlikely to achieve growth in underlying EBITA for fiscal 2026, while still targeting higher aggregated revenue than in fiscal 2025.
Waste, healthcare and specialty manufacturers
Cleanaway Waste Management reduced its full-year operating earnings forecast by about A$20 million, citing a combination of higher costs, lower activity and timing differences in cost recovery tied to the conflict.
Cochlear, the maker of hearing implants, trimmed its profit outlook for 2026 after weaker trading in developed markets. The company pointed to slower surgical volumes, fewer hearing-aid referrals and softer consumer sentiment. Cochlear also said the Middle East war has introduced additional risks of order cancellations, delivery delays and raised receivables exposure, exacerbating margin pressure and contributing to restructuring costs.
Retail and consumer staples
Woolworths, the leading Australian supermarket chain, said the conflict has created considerable uncertainty for both customers and suppliers and compounded existing cost-of-living pressures. The grocer warned that domestic food segment earnings growth for fiscal 2026 would no longer reach the top end of previously guided ranges, citing fuel-driven cost pressures and investments to retain customers. Woolworths also announced it will freeze shelf prices for 300 household staples for three months starting May 1, attributing the move to conflict-driven cost pressures on Australian suppliers.
a2 Milk cut its fiscal 2026 profit expectation, saying higher freight costs from the conflict and temporary supply-chain interruptions have affected availability of China-labelled infant milk formula in its largest market.
Banking and financial services
National Australia Bank said it expects to record credit impairment charges of A$706 million in the first half of fiscal 2026. NAB added that second-quarter interest-rate volatility, a softer New Zealand dollar and the higher provisioning would reduce the groups Common Equity Tier 1 capital ratio by about 20 basis points as of March 31. The bank also plans to apply a 1.5% discount to the first-half dividend reinvestment plan to raise up to A$1.8 billion to bolster its balance sheet.
Westpac, Australias second-largest bank by assets, said energy market shocks stemming from the conflict were becoming a profit headwind in the first half of the financial year ended March 31 and had prompted it to lift credit provisions. Westpac reported a weaker net interest margin in its treasury and markets division amid interest-rate volatility linked to the conflict, and said provisioning for potential bad debt is at its highest level since the COVID-19 pandemic.
Overall implications
Across these sectors, firms are responding with a mix of cost pass-throughs to customers, capacity adjustments, suspended buybacks and increased provisioning. Some firms are benefiting from demand resilience on specific international routes or from potential investment shifts toward alternative energy, but for many the immediate effects are higher operating costs, supply-chain constraints and the potential for softer consumer spending as households face elevated costs.
Currency conversion noted in company statements used a rate of $1 = 1.3996 Australian dollars where relevant.
Key points
- Higher fuel and freight costs tied to the Gulf conflict are driving fare increases, route cuts and higher operating expenses for airlines and airports.
- Banks and financial firms are increasing credit provisions and trimming capital metrics amid interest-rate volatility and currency movements; some are raising capital through dividend plan discounts.
- Manufacturing, packaging and retail businesses report higher input and logistics costs, plan price pass-throughs and in some cases have cut earnings forecasts or deferred shareholder returns.
Risks and uncertainties
- Persistent volatility in jet fuel and energy markets that could further raise costs for aviation, logistics and manufacturing sectors.
- Supply-chain disruptions and shipping route closures that may lead to production halts, higher inventory levels and delivery delays affecting food producers, packaging firms and exporters.
- Wider economic impact on consumer demand and construction activity across Australasia, which could amplify margin pressure for retailers, builders and materials suppliers.
The companies outlined here have publicly signalled impacts stemming from the Middle East conflict on costs, operations and outlooks. Management responses have included price increases, capacity adjustments, profit guidance reductions, increased provisioning and the suspension or cancellation of buybacks. The net effect across sectors will depend on how long elevated energy and freight costs persist and whether demand patterns shift materially in response to higher prices and ongoing geopolitical uncertainty.