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Gulf crisis affects Australian and New Zealand companies, from airlines to banks
The U.S. and Israel war against Iran is causing financial stress for companies in Australia and New Zealand. Higher fuel prices are causing inflation, affecting consumer and business confidence and weighing on corporate earnings. Some of the companies in Australia and New Zealand have reported an impact on their business from the Middle East conflict. Air New Zealand New Zealand's Flag carrier predicted its largest annual pre-tax loss in four years two months after withdrawing their earlier 2026 forecast, as the Iran War pushed up jet oil prices, increasing costs and adding pressure from weak demand, fleet constraints, and increased costs. Air New Zealand forecasts its annual pre-tax losses between NZ$340 and NZ$390 ($201.8 million-$231.5 millions), a change from last year's NZ$189million profit. Air NZ announced a price increase in March after suspending its 'earnings forecast for the full year. Auckland International Airport Auckland International Airport in New Zealand said that flights to the Middle East from Auckland were affected. In March, the number of passengers on Middle Eastern routes dropped by 81% and seat capacity fell by 73% compared to a year earlier, according to airport operator. a2 Milk: New Zealand's A2 Milk has cut its profit forecast for fiscal 2026 as higher freight costs resulting from the conflict, and temporary disruptions in the supply chain have affected the availability of the infant formula under the China label on its largest market. Cleanaway Waste Management: The company's full-year earnings forecast was cut by A$20,000,000 ($14.17million), due mainly to higher costs, reduced activity and timing differences of cost recovery. Cochlear: Cochlear, an Australian manufacturer of hearing implants, has lowered its profit forecast for 2026 due to a?weaker trade in developed markets'. The company cited slower surgical volumes and consumer sentiment as reasons. The Middle East War has increased the risk of order cancellations and delivery delays, as well as a higher exposure to receivables. This will also worsen margin pressures and increase restructuring costs. Fletcher Building Fletcher Building in New Zealand said that it is 'indirectly exposed to the Middle East conflict through supply chains, freight lines, energy costs and the wider economic impact of construction demand throughout Australasia. Construction materials manufacturer expects to increase prices in all divisions. Plastics, where the company claims immediate exposure is present, will experience price increases of up to 36%. Other divisions can expect a 1%-5% increase. Flight Centre Travel: Flight Centre Travel, an Australian corporate travel manager, said that hostilities in Middle East temporarily disrupted international travel patterns. It estimated a profit impact of A$10,000,000 on its leisure segment in April. The firm expects foreign exchange headwinds to occur in the fourth quarter due to the translation of overseas profits, given the strength the Australian dollar. Its cost margin also fell from 9.2% during the third quarter, as it implemented measures such as freezing support roles. Fonterra: Fonterra, the New Zealand dairy company, said that the conflict could impact its supply chain and increase its inventory and costs during the second half of the year. It also contributed to the volatility in global commodity price. National Australia Bank National Australia Bank expects to incur a credit impairment charge of A$706 ($504.44 millions) in the first fiscal half of 2026. NAB stated that the volatility of interest rates in the second quarter, the weakening New Zealand dollar, and the increase in provisioning would result in a reduction of the common equity tier one capital ratio for the group by approximately 20 basis points on March 31. The company also plans to apply a discount of 1.5% to its dividend reinvestment program for the first half to raise A$1.8 billion and help strengthen its balance sheet. Orora: Orora, a packaging company, has lowered its earnings forecasts for its French subsidiary Saverglass. It also cancelled its share-buyback program citing war impacts. Due to the closures of shipping routes, the company also stopped bottle production in its glass production plant at Ras al-Khaimah (United Arab Emirates). Qantas: Qantas Airways is Australia's national carrier. It has raised its fuel costs outlook for the second part of the year by up to A$800m. However, it says that its planned A$150m share buyback program has yet to begin, citing the volatile and sharply increased jet fuel prices. Qantas has raised fares to offset the rising cost of its flights and shifted them towards stronger routes, such as Paris or Rome, where demand is still strong. They have also reduced their domestic capacity in the second quarter by approximately 5 percentage points. Qube Holdings Qube estimates that the Middle East conflict will have an impact on its EBITA of between A$10 and A$20 million for fiscal 2026. The logistics firm stated that recent events could encourage an increase in investment in alternative energy projects which would be beneficial to the company. Virgin Australia Virgin Australia expects a rise in fuel costs of between A$30 and A$40million ($21.39 to $28.52million) during the second half fiscal 2026. In mid-March, the airline announced that it would be adjusting its fares due to the rising costs in the aviation industry. Westpac: Westpac, Australia’s second largest bank by assets, has said that energy market shocks were causing profit pressures in the first half the financial year ending March 31. This led the lender to increase its credit provisions. Westpac's net margin for its Treasury and Markets division has been?weaker due to interest rate volatility related to the conflict. A weaker outlook is already leading credit provisioning up. Westpac has increased its provision for bad debts since the COVID-19 pandemic. Woolworths: Woolworths, Australia's largest grocery store, has said that the Middle East conflict is creating significant uncertainty for both customers and suppliers. This will increase the already high cost of living. Fuel price pressures, customer retention investments and fuel price increases will all affect the firm's forecasted growth in the domestic food segment for fiscal 2026. Woolworths has also announced that it will freeze the prices of 300 household staples from May 1 for a period of three months. This is due to cost pressures imposed by Australian suppliers as a result conflict. Worley: Worley estimated that the negative impact of the Middle East Conflict on its underlying EBITA in fiscal 2026 will be between A$30 and A$40 Million. The Australian engineering company warned that it would not be able to grow its underlying EBITA by more than 5% in fiscal 2026 but it continued to aim for higher revenue growth than fiscal 2025.
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Air NZ warns it will suffer its biggest loss in four years due to Middle East conflict driving up fuel prices
Air New Zealand forecasts its biggest annual pre-tax losses in four years on Thursday, as the long drawn-out 'Middle East Conflict' drives up jet - fuel prices, increasing -its expenses, and adding pressure from weak demand, fleet constraints, and increased costs. The flag carrier of New Zealand forecasts its annual loss before tax of between NZ$340 and NZ$390 ($201.62-$231.27 millions), assuming an average jet fuel price per barrel of $145 in the second half. Last year, it had made a profit worth NZ$189m. The U.S. and Israel's war on Iran has caused a severe disruption in energy supply. Crude?prices have soared. The price of jet fuel, which is derived from crude oil, has risen to $150 to $200 per barrel. This puts pressure on airlines, for whom fuel accounts for as much as a quarter of their operating costs. Air New Zealand anticipates consuming 4.1 million barrels of fuel in the period January-June, bringing its fuel bill up to NZ$980 millions in the second half of the financial year. This is 32% more than what was predicted in February. This will result in a bill of NZ$1,75 billion per year, as opposed to NZ$1,48 billion per annum in 2025. The carrier stated that "the scale and speed of recent changes in jet fuel and refining margins have created a'material external shock for the aviation industry worldwide." If fuel prices remain at these high levels, the airline anticipates announcing?further updates to capacity in the coming week." Air New Zealand already reduced its total group capacity?three times across its network?and implemented fare hikes. However, the recent slowdown in bookings and weak domestic and trans-Tasman demands continue to weigh. $1 = 1.6863 New Zealand Dollars (Reporting and editing by Nikita Marie Jino, Bengaluru)
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NTSB: US airlines need to improve their pilot training in the event of smoke in the cockpit
After a 2023 smoke-in cockpit incident, the?National Transportation Safety Board recommended on Wednesday that pilots be better prepared for such emergencies. The?board cited a Southwest Airlines flight in December '2023 of a 737 MAX after a bird flew directly into the engine. Smoke quickly filled the cockpit. The NTSB warned that if such an incident occurred during nighttime or under instrument meteorological conditions the results could be disastrous. Southwest has not yet commented. The NTSB reported that the Southwest flight crew had difficulty seeing the instruments and items on the checklist as the visibility decreased within seconds. The pilots put on oxygen masks and completed emergency procedures. They declared an emergency, returned safely to the airport, and declared an emergency. The 139 passengers on board were not injured. The NTSB stated that passenger airlines do not have to simulate realistic smoke in cockpit training, even though the Federal Aviation Administration is notified of near-daily in-flight emergencies caused by smoke in the cockpit. The NTSB stated that "existing training is often verbal discussions of a smoke-event rather than immersive simulations involving reduced visibility and?elevated work load". The board recommended the FAA work closely with industry in order to "develop realistic, standardized smoke-in cockpit simulation training for pilots" and integrate that training into its guidelines for overseeing "airline training programs." The FAA decided not to take any immediate action in 2024 after convening a board of review to?consider the concerns regarding Boeing 737 MAX engine, including the '2023 incident. A bird strike caused smoke to fill the passenger cabin of a Southwest flight departing Havana in March 2023. Boeing published a bulletin in February 2024 to alert flight crews about possible flight deck and cabin impacts associated with severe engine failure. (Reporting and editing by David Shepardson)
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Carney will visit Calgary this Friday to announce a deal on industrial carbon pricing, sources claim
A source from the Alberta government and an industry insider with knowledge of this plan said on Wednesday that Canadian Prime Minister Mark Carney would 'visit' Calgary on Friday in order to announce details about a new agreement with Alberta regarding industrial carbon pricing. A third source familiar with the deal said that Canada and Alberta, its largest oil-producing province, are close to a deal which will increase the cost of credit in the industrial carbon market of the province to C$130 per metric ton by the year 2040. The Globe and Mail reported the credit cost and date agreed upon on Wednesday. Alberta frozen?its headline carbon price for industrial use in May 2025. Credits on its market are currently trading between C$20 to C$40 per metric ton. Experts say this is too low for polluters to be motivated to invest in technology to reduce emissions. Sources who weren't authorized to reveal the plans said Carney would visit the oil and gas?city, for the first since November when he agreed with Premier Danielle Smith to work together in order to boost investment in energy production. The sources said he ?will announce the new industrial carbon pricing plan, aimed at strengthening Alberta's pollution pricing regime while also clearing the path for Alberta's plan to propose a one-million-barrel-per-day crude oil pipeline to British Columbia's northwest coast. Third source: The agreement will include escalating price floors for carbon to ensure Canada's large emitters continue to be incentivised to reduce their emissions each year. Source: The agreement will see Alberta's carbon headline price increase to $100 a metric ton by next year, compared to the current $95 a metric ton. It will then rise to $130 per ton in 2030, and then escalate 1.5% each year beginning in 2036. The Prime Minister's Office did not confirm that the visit had taken place. Environmentalists want Alberta's carbon credit market price to reach C$130 in 2030 and not?2040. They have claimed that a shorter timeframe would encourage companies make immediate efforts to lower their emissions. Alberta and the oil and natural gas industry have been lobbying to delay the implementation date. They argue that a carbon price regime which puts Canada's oil sands industry at a disadvantage will slow down the growth of oil sands production at a time when the country wants to increase its energy exports while reducing its dependence on the U.S. The federal government said that?its approval for a new pipeline is dependent on Canadian oil companies investing in emission reductions through carbon 'capture technology. Adam Waterous, the executive chair of Canada’s fifth largest oil company, Strathcona Resources told reporters on Wednesday that companies would not invest in pipelines until the government lifted an existing ban on oil tanks off Canada’s northwest coast, and addressed other barriers. Reporting by Amanda Stephenson, Calgary; Editing and production by Aurora Ellis and David Gregorio
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Carney will visit Calgary this Friday to announce a deal on industrial carbon pricing, sources claim
A source from the provincial government and an industry insider with knowledge of the deal said on Wednesday that Canadian Prime Minister?Minister?Mark Carney would visit Calgary on Friday in order to announce details of a new agreement with Alberta regarding industrial carbon pricing. The Globe and Mail reported first that Canada and its main oil-producing Province of Alberta were on the verge of a deal which will increase the?effective credit cost of the industrial carbon market in the province to C$130 per metric ton by the year 2040. Alberta froze its industrial carbon price headline in May last year. Credits in the market trade for between C$20 and C$40 per metric ton, which experts say is too low to encourage polluters to invest in emissions reduction technologies. Sources who weren't authorized to reveal the plans said that Carney would visit the oil and gas city for the very first time since November when he agreed with Premier Danielle Smith of Alberta to boost energy production investment. They said he will announce the new industrial carbon ?pricing plan, which is aimed at strengthening Alberta's pollution pricing regime while also clearing the path for Alberta's plan to propose a new one-million-barrel-per-day ?crude oil pipeline to British Columbia's northwest coast. Environmentalists want to see Alberta's industrial carbon price reach C$130 in 2030 and not 2040. They argue that a shorter timeframe would encourage companies to take immediate steps to reduce emissions. Alberta and the oil-and-gas industry are lobbying for an earlier implementation date. They argue that a carbon pricing system would put Canada's oil sands industry at a competitive disadvantage, and slow the growth of oil sands production. This is at a time when the country wants to increase its energy exports while reducing its dependence on the U.S. The Prime Minister's Office spokesperson refused to confirm the visit.
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Traders say that the exports of Russian ESPO Blend crude oil from Kozmino will increase by 1.5% in May.
Three sources familiar with the plan say that Russia will increase 'ESPO Blend oil' loadings at its Far East Kozmino Port to 4.3 million metric tonne a month in May from 4.1 million metric tonne a month earlier. Calculations showed that ESPO loadings at Kozmino would increase by 1.5% per day in May compared with April. The planned amount is equal to 1,04?million barley per day. Since last summer, oil exports from Kozmino?have been increasing, and now stand at?around 1?million barrels per day, due to the increased capacity of the port and pipeline system, traders reported. Transneft, the operator of the Eastern Siberia-Pacific Ocean pipeline, said that it would expand the pipeline to Asia in order to increase exports through Kozmino. RIA reported this on 'Tuesday citing Transneft vice president Sergei Androninov. RIA reported that Transneft planned to finish the expansion in 2029. The ESPO Blend is the flagship oil grade of Russia for Asian markets. Russia is trying its best to increase?oil?exports to the East, as European countries have reduced their energy purchases from 2022. (by journalists in MOSCOW, edited by Kiro Donovan).
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FedEx to split freight units in two equal shares
FedEx announced on Wednesday that it would give its shareholders a share of the trucking company it is selling for every two shares they hold in the parcel delivery firm. FedEx Freight will be listed as an independent company at the New York Stock Exchange under the symbol "FDXF" on June 1. FedEx Freight is the U.S.'s largest provider of "less-than truckload" services. The company lists its list at a moment when the rate for truckloads has improved, and federal regulators have severely restricted commercial driver licenses for non-citizens. Most trucking executives, however, have stated that they have yet to witness a meaningful improvement in the demand. FedEx Freight announced?last week that it is expecting a 12% operating margin in 2026 on revenue projected at $8.7 billion, and an adjusted operating profit of $1.1 billion. Marshall Witt, FedEx Freight’s finance chief, said last month that FedEx Freight’s average revenue growth will be between 4% and 6% over the next few years. Core profit is also expected to rise between 10% to 12% per year. FedEx Freight is in competition with XPO, 'Saia' and Old Dominion Freight Line. FedEx Freight assets are not fully appreciated by FedEx, according to analysts. FedEx Freight will pay its parent FedEx a dividend in the amount of $4.1 billion as part of the spin-off. This is before its separation on June 1. (Reporting from Nandan Mandayam, Bengaluru. Editing by Leroy Leo.)
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Officials say that Russia launched a massive drone attack against Ukraine and killed three people.
Officials said that Russia launched a drone attack against Ukraine during the day on Wednesday. The attack targeted?critical infrastructure and killed at least three people in western Ukraine. NATO member Poland was also prompted to?scramble its fighter jets. HUR, Ukraine's military intelligence service, said that the drone attack was intended to overwhelm Ukrainian air defenses and warned of missile attacks in the future. The attack could last a long time, according to the report. "Russia is continuing its strikes, and doing so brazenly. They are deliberately targeting our rail infrastructure and civil sites in our cities," said President Volodymyr Zelenskiy on Telegram. "It's important to resist every attack with resilience." It's important to stand up for Ukraine and not be silent about Russia’s war." This was the first major attack since a ceasefire brokered by the United States between Ukraine and Russia that ended on Monday. The Polish army reported that Poland had scrambled its fighter jets in response to Russian air strikes against Ukraine. Zelenskiy reported that at the beginning of the attack more than 100 Russian drones entered Ukrainian airspace. There was no immediate data on the scale of the attack. HUR reported that Moscow targeted critical infrastructure, essential services, and government buildings in major cities. WESTERN UKRAINE: ATTACKS The governor and police reported that three people died and six others were injured in Rivne region, located to the northwest. Khmelnytskyi, a neighboring region, was also attacked, said its governor, adding that 3 people were wounded. The acting mayor of Lutsk said that explosions were also heard in the city located in the northwest. Serhiy Beksrestnov, a defence adviser, said that the strike showed how the use of drones has evolved by Moscow. The tactics have changed from attack to attack. He said that this time a large number of drones was moving between 5km and 10km from the Belarus border to overwhelm Ukraine's air defences and get to the western areas. Since the beginning of its invasion, Russia has carried out most major missile and drone strikes at night. It has, in recent months, sent more drones and missiles at daytime. Regional officials reported that Russian drones also targeted the southern cities Kherson and Odesa where nine people were injured. Moscow has denied 'intentionally' attacking civilians, but it is known that thousands have been killed during the conflict. It also claims that strikes on civilian infrastructures are justified if they reduce Ukraine’s fighting ability. Kyiv's long-range attacks against Russia's energy sector have intensified in recent months, though at a lesser scale. (Reporting from Anna Pruchnicka, Gdansk; additional reporting by Yuliia Dyesa, Kyiv; Editing by William Maclean).
US FAA equips its airport vehicles with Transponders
The Federal Aviation Administration announced Wednesday that it would'spend $16.5m to install transponders on its airport vehicles following a fatal accident in March between an Air Canada Express plane and a firetruck at New York LaGuardia Airport.
The fire truck lacked a transponder which would have sent its location to the?air traffic controller.
Last month, the Port Authority of New York &?New Jersey (which oversees LaGuardia Airport and other airports in the area) announced that it would add transponders on its vehicles which?operate near runways.
The FAA intends to immediately start equipping its 1,900 vehicles in 264 airports with surface awareness technology.
Transponders are used by air traffic controllers to identify and track vehicles in the runways and taxiways.
FAA Administrator Bryan Bedford stated that the devices are "helpful in preventing dangerous runway accidents and we're closing a critical visibility gap?on our nation's taxiways and runways by accelerating deployment of this technology."
The National Transportation Safety Board reported last month that the 'ground surveillance system' at LaGuardia did not alert drivers when they were near the runway.
The FAA has noted that airports are able to use federal funds for 'equipment of vehicles with transponders. More than 50 airports already have expressed an interest. (Reporting and Editing by Franklin Paul, David Gregorio, and David Shepardson)
(source: Reuters)