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Australia to Lead World in Air Traffic Growth
Nov 24, 2009

Australia and New Zealand are expected to lead the entire developed world in terms of air passenger growth.

According to aircraft manufacturer Airbus, New Zealand and Australia are projected to outshine the entire developed world in terms of increase in air traffic, reports WATODAY.

John Leahy, the company's chief operating officer for customers, projected that in South Pacific, a region with the dominance of two trans-Tasman markets, airlines will need 630 additional aircrafts over the next two decades. This new fleet of aircrafts will worth around US$ 87 Billion, reported by WATODAY on November 4, 2009.

Moreover, the air traffic in the region is likely to grow at an annual rate of 5%, which is more than the global average of 4.7%. Among the developed markets, it is the fastest growth rate. In addition to this, it was anticipated that by 2028, the Asia-Pacific region will account for the highest 33% share of the global airline passenger traffic, ousting North America from first to third place with 20% share. Europe was projected to retain its second position with 26% share.

The aviation sector in Australia is gradually improving, although the domestic tourism businesses are still finding it difficult to compete in the wake of strong exchange rates. As Australia is geographically close to the emerging economies of Asia - India and China - it is well-poised to benefit from the improving GDP and favorable business environment in these countries. 

As per the recent data of International Airline Activity from the Bureau of Infrastructure Transport and Regional Economics (BITRE), in the month of August, there was a 3.7% increase in the number of passengers who traveled by air, as it reached 2 Million. This increase was a welcome come back as Australia did not witness any international passenger movement in or out of its airports during the period spanning from January to July 2009.

On the other hand, overseas travel is benefiting from the relatively sound Australian economy and high exchange rate. However, it is making it tough for the domestic tourism businesses to compete.

According to a Research Analyst at RNCOS, "Although there are good projections for the Australian airlines industry in terms of number of passengers, the domestic market is not yet yielding the rewards. Further, it is to be noted that the availability of affordable airfare is the key trigger for this growth and hence, the industry needs to wait a bit more for the revival."

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