Australian and New Zealand firms signal strain from Gulf conflict

The economic ripple effects of the conflict are forcing a widespread re-evaluation of financial health across multiple sectors. Air New Zealand, for instance, has forecast its largest annual pre-tax loss in four years, citing a sharp rise in jet fuel costs and persistent fleet constraints. Similarly, Qantas Airways has adjusted its fuel cost outlook by up to A$800 million, prompting the airline to raise ticket prices and shift capacity toward more resilient international routes. The impact is equally visible in logistics and retail; Orora has halted bottle production at its UAE facility due to shipping route closures, while supermarket giant Woolworths warns that conflict-driven inflation is compounding existing cost-of-living pressures, forcing a freeze on shelf prices for hundreds of staples to maintain customer retention.

Financial institutions are also bracing for long-term instability. National Australia Bank expects to incur significant credit impairment charges as interest-rate volatility and a weaker New Zealand dollar erode capital ratios. Westpac has mirrored this caution, increasing its provisions for bad debt to levels not seen since the COVID-19 pandemic. Meanwhile, manufacturers and construction firms like Fletcher Building and a2 Milk are struggling with surging freight costs and supply chain bottlenecks, leading many to pass increased expenses directly to consumers. As these firms navigate the uncertainty, the cumulative effect is a narrowing of profit margins and a cautious outlook for the remainder of the fiscal year.