The developments appear to be a positive sign for Flight Centre Travel Group, which on Wednesday downgraded its earnings for the current financial year due to the Middle East conflict.
The company, which operates in Australia, New Zealand, South Africa, Canada and the UK, now expects an underlying profit before tax between $275 million and $295 million for 2025/26.
It had previously forecast an underlying result between $310 million and $345 million, compared to the prior year's $286 million result.
"It has been driven by an external shock - the Middle East conflict disrupting peak leisure travel - not by a deterioration in our underlying business," managing director Graham Turner said in a statement to the stock exchange.
After the war began in late February, the Australian government issued a 'do not travel' warning for the region, as the US began its attack on Iran.
The advice dampened Australian demand for travel to the Middle East and to regional hubs normally served by some international carriers as jumping-off points to destinations in Europe.
But on Wednesday, the government raised its advice to  'reconsider your need to travel' for Bahrain, Israel, Kuwait, Qatar and the United Arab Emirates, as the prospect of a peace deal narrowed.
"Reconsider your need to travel also means 'reconsider your need to transit'," the government said.
"If you need to transit these locations, stay as short a time as possible and eliminate unnecessary activities."
Flight Centre said the conflict mostly affected its fourth quarter leisure travel market, with earnings expected to fall by about $50 million.
It cited cancellations and booking deferrals, weaker long-haul bookings and a shift to lower-margin routes.
"Even after absorbing Q4 disruption, the group still expects an underlying profit broadly in line with FY25," Mr Turner said.
Flight Centre said the new peace deal between the US and Iran will give it a clearer runway into 2026/27 and a "significant earnings tailwind".
Flight Centre also announced an up to $200 million on-market share buyback, after its last one was completed in May.
Mr Turner said the buyback reflects the company's view that it believes its shares, which closed on Tuesday at $11.81, are undervalued.
