April 22 - Businesses in Australia and New Zealand are increasingly signalling the tangible financial effects of the U.S.-Israeli war on Iran, as higher energy and transport costs ripple through operations, consumer and business sentiment, and corporate balance sheets.
The shock waves are visible across sectors. Airlines cite sharply higher and more volatile jet fuel prices and have adjusted capacity and fares. Logistics and ports face route closures that have curtailed shipments. Manufacturers and processors report higher input and freight costs and temporary supply disruptions. Banks and lenders, meanwhile, are increasing provisions as interest-rate volatility and currency moves interact with weaker economic conditions.
Airlines and airports
Air New Zealand suspended its full-year earnings outlook in early March, attributing at least part of the decision to volatility in the jet fuel market. The carrier was among the first in the region to announce fare increases to offset rising fuel costs. On April 7 the airline said it would reduce flights through May and June, trimming about 4% of scheduled flights and affecting roughly 1% of total passenger numbers.
Qantas Airways has also updated its cost expectations, raising its fuel-cost outlook for the second half by as much as A$800 million. The airline said it has not initiated a planned A$150 million share buyback and is responding to the cost pressure by lifting fares and reallocating capacity toward stronger international routes such as Paris and Rome, while cutting domestic capacity by approximately 5 percentage points in the June quarter.
Virgin Australia anticipates fuel-cost increases in the range of A$30 million to A$40 million for the second half of fiscal 2026. In mid-March the airline group noted it was adjusting fares in response to rising aviation-sector costs, which it said have been exacerbated by developments in the Middle East.
Auckland International Airport reported that its routes to the Middle East have been materially affected. In March passenger numbers on those Middle Eastern routes declined by 81% year-on-year, and seat capacity on the routes fell by 73% compared with the same month a year earlier, the operator said. The airport also noted broader flight disruptions between Auckland and the Middle East.
Freight, logistics and ports
Logistics firms and packaging manufacturers are experiencing both direct and indirect effects. Qube Holdings expects an EBITA impact of roughly A$10 million to A$20 million for fiscal 2026 linked to the conflict. The company also suggested that recent events could accelerate investment in alternative energy projects, presenting a possible strategic shift in capital allocation.
Orora, a packaging company, trimmed its annual earnings forecast for its French unit Saverglass and cancelled its share buyback programme, pointing to the war's impact. The company also halted bottle production at its glass facility in Ras al Khaimah in the United Arab Emirates due to closed shipping routes.
Cleanaway Waste Management lowered its full-year operating earnings guidance by about A$20 million, citing higher costs, reduced activity levels and timing differences in its ability to pass on costs to customers.
Manufacturing, construction and dairy
Fletcher Building described indirect exposure to the Middle East conflict through supply chains, freight routes and energy costs, as well as through the potential for weaker construction demand across Australasia. The construction materials group plans to pass costs through to customers, increasing prices across divisions. Fletcher noted that its plastics division faces immediate exposure and will see price increases of up to 36%, while other divisions will experience price rises in the range of 1% to 5%.
Fonterra, New Zealand's dairy cooperative, said the conflict is disrupting its supply chain and could raise inventory levels and costs in the second half of the year. The company also warned that the situation is contributing to greater volatility in global commodity prices.
a2 Milk cut its fiscal 2026 profit guidance after higher freight costs and temporary supply-chain interruptions affected the availability of its China-labelled infant milk formula product in its largest market.
Healthcare
Cochlear trimmed its 2026 profit forecast after weaker trading in developed markets. Management pointed to slower surgical volumes, fewer referrals from hearing-aid providers and softer consumer sentiment. The company said the Middle East war adds specific risks including possible order cancellations, delivery delays and greater receivables exposure, all of which could intensify margin pressure and increase restructuring costs.
Banks and financials
National Australia Bank said it expects to record credit impairment charges of A$706 million in the first half of fiscal 2026. NAB noted second-quarter interest-rate volatility, a weaker New Zealand dollar and the higher provisioning would reduce the group's common equity tier 1 capital ratio by about 20 basis points as of March 31. The bank also intends to apply a 1.5% discount to its first-half dividend reinvestment plan to raise up to A$1.8 billion to bolster its balance sheet.
Westpac reported that energy-market shocks linked to the conflict are emerging as profit pressures over the first half of the financial year ended March 31, prompting higher credit provisioning. Westpac said its net interest margin in its treasury and markets division weakened amid interest-rate volatility associated with the conflict, and that its provisioning for potential bad debt is at its highest level since the COVID-19 pandemic.
Engineering and professional services
Worley said the hostile situation in the Middle East is expected to adversely affect its underlying EBITA for fiscal 2026 by roughly A$30 million to A$40 million. The Australian engineering group warned it is unlikely to achieve growth in underlying EBITA in fiscal 2026, although it continues to aim for higher aggregated revenue growth than in fiscal 2025.
Across the corporate landscape, the common themes are rising input and transport costs, constrained capacity on specific trade routes, and increased earnings and provisioning uncertainty. Companies are responding in varied ways - from passing costs through to customers and re-balancing capacity, to cancelling buybacks and raising capital - as they attempt to protect margins and shore up balance sheets in an environment of elevated cost volatility.
Currency note: $1 = 1.3996 Australian dollars.