Qantas Fuel Bill Up A$800M; Westpac Flags Stagflation
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- Qantas Airways warned its jet fuel bill for the second half of FY ending June could rise by up to A$800 million ($567 million), or 32% above prior forecasts, saying jet fuel prices have more than doubled, and responded by cutting flights and hiking fares.
- Qantas also paused a planned A$150 million share buyback, citing heightened uncertainty from the "dynamic environment" of energy-market disruption.
- Westpac Banking Corp raised credit provisions to their highest level since the COVID-19 pandemic, anticipating that rising prices and interest rates will leave some customers — especially energy-exposed borrowers — unable to keep up.
- Reserve Bank of Australia Deputy Governor Andrew Hauser said the country could be facing "the central bank's nightmare: the stagflationary shock — inflation up, activity down," the same day business confidence and consumer sentiment both collapsed.
- National Australia Bank's business confidence index plunged 29 points to -29 in March, a magnitude previously seen only during the 2020 pandemic, while a separate survey showed consumer sentiment fell 12.5% in April to its lowest in more than two years.
- a2 Milk in neighboring New Zealand also slashed its fiscal 2026 profit guidance on Monday, citing supply chain disruptions from the Middle East conflict — evidence the shock is regional, not just Australian.
- Investors reacted sharply: Westpac shares dropped 3.7% (a bigger move than expected) while Qantas fell 1%, with analysts warning that the longer the conflict drags on, the more profit warnings will follow.
Why it matters: Qantas quantified the hit at up to A$800M, while Westpac — whose shares fell 3.7% — is bracing for higher bad debts from energy-exposed borrowers. Combined with the RBA's stagflationary shock warning and the steepest business confidence plunge since the pandemic, the Middle East conflict is now visibly cutting into Australian corporate earnings and consumer purchasing power.
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