A thriving market
Although Oceania is a region with fewer than 40 million people (0.5 percent of the world's population), it accounts for 3.2 percent of global air traffic. Traffic is forecasted to continue growing as the region establishes stronger connections with other Asia Pacific nations and the world. Traffic is expected to grow at an annual rate of 5.5 percent over the next 20 years. Most of this growth will come from flights to and from Oceania, rather than from flights within the region. Flights to Southeast Asia will increase as that region grows as an intermediate point between Oceania and the rest of the world. In addition, there will be more connecting flights to North America, the Middle East, and especially China, as trade and tourism continue to rise. Companies in China are looking to Australia for raw resources; therefore, traffic between those nations is expected to grow at a rapid pace.
Airline strategies continue to change
Over the past decade, Oceania's commercial aviation market has changed dramatically as airlines have redefined themselves amid economic uncertainty. Qantas, in response to the rise of low-cost carriers (LCC), has successfully introduced its own LCC, Jetstar. Virgin Blue sought to compete against Qantas by creating a spinoff airline (V Australia), but has since changed its strategy and will rebrand all of its airlines under the name Virgin Australia. Air New Zealand has continued to innovate by introducing Boeing 777-300ERs with unique economy Skycouch seats. In general, liberalization of markets is leading international carriers to compete for passengers traveling to and from Oceania.
New airplanes are needed
Increased traffic and changing business strategies are creating a demand for new airplanes in the region. Over the next 20 years, it is expected that approximately 970 new airplanes will be delivered to airlines within Oceania, including 670 single-aisle airplanes to transport people within the region and to nearby Southeast Asia. International traffic will require about 260 additional twin-aisle airplanes and 30 large commercial airplanes. As the region becomes more interconnected with the rest of the world, the economical new 787 Dreamliner will be in demand to serve longer, thinner routes.
