A thriving market
Oceania is a dynamic region of roughly 40 million people. Total air traffic is forecast to continue to grow at the current annual rate of 4.8 percent over the next 20 years as connections to the neighboring Asia Pacific region and other world regions improve. Traffic growth within Oceania will slightly lag the overall rate at 4.4 percent. Capacity between Oceania and Southeast Asia, the primary gateway to other world regions, is forecast to increase 5.0 percent per year. In addition, continued expansion of trade and tourism will spur the opening of more flights and new markets to North America, the Middle East, and China. Middle East airlines, bridging Oceania to Europe and Africa via stops in the Middle East, are forecast to spur 7.0 percent growth of Middle East flow. Traffic between China and Oceania will grow at a robust 6.5 percent.
The region's airlines continue to evolve
Airlines within Oceania continue to evolve in response to economic conditions and competition. Qantas introduced its own LCC, Jetstar, to counter increasing LCC competition in Oceania and has extended that model throughout Asia with franchises in Japan and Hong Kong. Recently Qantas entered a 10-year partnership with Emirates to collaborate on routes, pricing, scheduling, and other important aspects of operations. Virgin Australia acquired a major share of tigerair Australia. Etihad Airways, Singapore Airlines, and Air New Zealand acquired ownership shares of Virgin Australia. The first 787s in the region will arrive at Jetstar in the second half of 2013.
New airplanes are needed in the region
As traffic increases and airlines evolve, there will be a continued need for new airplanes in the region. Over the next 20 years, Oceania is expected to need 1,010 new airplanes to be delivered, of which 730 will be single-aisle airplanes needed to transport people within the region or to nearby Southeast Asia. To meet demand for travel across the globe, 270 widebody airplanes will be required, of which approximately 200 will be small widebodies, 50 will be medium widebodies, and 20 will be large widebodies.