Qantas indicated that increasing fuel expenses could lead to a potential reduction of up to $800 million in its profits, revealing on Tuesday that a reduction in its domestic flight offerings is on the horizon along with anticipated higher ticket prices.
In a market announcement, Australia's premier airline cautioned that jet fuel costs have surged more than twofold over the past year, estimating its fuel expenditure for the latter half of the financial year to be somewhere between $3.1 billion and $3.3 billion.
This translates into an additional $600 million to $800 million spike in its projected fuel costs; however, the airline noted it continues to experience “strong demand for international travel to Europe as travelers seek different options. ”
Consequently, Qantas has decreased its domestic flight operations by five percentage points for the fourth quarter of 2026, with those impacted being reached out to directly and given options for alternative flights or refunds.
Although not serving the Middle East, Qantas also indicated there would be fare hikes and modifications to its international routes due to the ongoing conflict in the area.
At the same time, Australia's second-largest bank has cautioned that the strife in the Middle East has impacted earnings from one of its internal sectors.
Westpac, set to disclose its first-half earnings on May 5, remarked that its markets sector would report diminished revenue and it intends to increase credit provisions.
“The geopolitical instability and the related rise in market fluctuations have influenced the … results,” it noted in a statement released to the stock market on Tuesday.
The net interest margin contribution from its treasury and markets division is projected to decrease to seven basis points in the second quarter of fiscal 2026, down from 15 basis points in the first quarter.
Westpac also highlighted challenges for certain customers already grappling with elevated living costs and a high-interest rate setting.
“With the supply shock stemming from disruptions in the energy sector likely to lead to increased inflation and elevated interest rates, a forecasted slowdown in economic growth will create a tougher situation for some customers,” it mentioned.
The conflict in the Middle East, which is now in its seventh week, commenced on February 28 when the United States conducted an offensive against Iran.
Since that time, financial markets have experienced volatility as oil prices surged from approximately $70 a barrel before the conflict to around $100, resulting in increased domestic fuel costs and unease regarding fuel availability.
While Westpac reported it is well-equipped to assist customers in this ongoing uncertainty, it also signaled a reduction in net profit by $75 million.
This decline was linked to a “noteworthy item” concerning its RAMS mortgage division, which is being sold to Pepper Money, KKR, and PIMCO. The transaction is expected to finalize in the latter half of its fiscal year.
Analysts currently predict that the bank will report a first-half net profit of about $3.6 billion, representing a slight improvement compared to the same period last year.
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