The market for commercial aircraft aviation fuel is expected to grow at a CAGR of approximately 20.86% during the forecast period of 2020 – 2025. Commercial aviation includes scheduled and non-scheduled aircraft, which include commercial air transportation of passengers or cargo. Factors such as the increasing number of air passengers and aircraft fleet across the world are expected to drive the market during the forecast period. However, the COVID-19 pandemic, leading to the lockdowns globally and very restricted domestic and international travel, has severely hit the aviation industry and is expected to restrain the market growth.
- Air turbine fuel (ATF) type is expected to dominate the market during the forecast period, owing to the fleet size that operates on this fuel type and ongoing developments like non-volatile particulate matter (nvPM) or black carbon emissions.
- Increasing concerns over emissions from the airline industry and initiatives taken by the government in developed economies to reduce airline emissions are expected to provide significant opportunities for commercial aircraft aviation fuel in the coming years.
- Asia-Pacific is expected to be the fastest growing market during the forecast period, with majority of the demand coming from countries like China, India, and Japan etc.
Key Market Trends
Air Turbine Fuel (ATF) Type to Dominate the Market
- Jet-A specification fuel has been used in the United States since the 1950s, and it is usually not available outside the United States and a few Canadian airports, such as Toronto and Vancouver. Jet-A has the same flash point as Jet A1 but a higher freeze point maximum (-40°C). It is supplied against the ASTM D1655 (Jet A) specification. Jet A1 is suitable for most turbine engine aircraft. It has a flash point minimum of 38 degrees C (100°F) and a freeze point maximum of -47 degrees C. Jet A1 is widely available outside the United States.
- LanzaTech’s ethanol-based ATJ-SPK was made eligible for use as a blending component with standard Jet-A for commercial airline use in the United States and in most countries around the world. Under the revised ASTM D7566, LanzaTech ATJ-SPK is eligible to be used up to a 50% blend in conventional jet fuel for commercial flights.
- In August 2019, Missouri S&T received USD 1.2 million from the United States Department of Transportation to determine emissions characteristics of non-volatile particulate matter (nvPM), or black carbon, from burning conventional and sustainable alternative jet fuels (Jet A) in jet engines at cruise altitudes.
- The primary industry classifies the cities with most aviation connectivity and international passengers as Aviation Mega Cities (AMC). According to Airbus, there are 66 cities as AMCs, with over 60% of traffic flying to and from these cities, and 17% between AMCs alone. With the increase in AMCs across the world, long-haul flights are increasing exponentially, driving the demand for jet fuels, thus increasing the demand for aviation fuel market in commercial sector.
- Therefore, based on the above-mentioned factors, air turbine fuel type (ATF) is expected to dominate the commercial aircraft aviation fuel market during the forecast period.
Asia-Pacific to Dominate the Market
- Asia-Pacific witnessed the highest year-on-year growth in 2019 while registering a 4.8% increase in comparison to 2018. Additionally, the region is expected to lead the world air traffic in the next two decades, as short-haul routes continue to increase in China and India in particular. Hence, the demand for aviation fuel is expected to increase during the forecast period.
- China is one of the largest aviation fuel markets globally, and it is also one of the largest in terms of air passengers carried. As of 2019, domestic passengers in China were the second largest in the aviation market after the United States.
- The Japanese aviation industry is dominated by two commercial airlines, namely Japan Airlines (JAL) and All Nippon Airways (ANA), with low-cost carriers (LCCs) such as Peach Aviation, Jetstar Japan, and Vanilla Air increasing their market share and fueling the aviation market in the country.
- Also, the Indian government started the domestic, commercial flights in June with reduced capacity, while the international commercial flights remain suspended. Therefore, with the decrease in commercial air traffic in the country, the demand for aviation fuel is expected to be subdued, hampering the market growth until the domestic and international air travel increases from the low mark registered during the first and second quarter of 2020.
- In early 2020, Virgin Australia used the United States-based Gevo Inc.’s Sustainable Aviation Jet Fuel (SAJF) to power 1 million kilometers of flights for all aircraft operating in and out of Brisbane Airport (BNE) in Queensland. The company stated that it marked an important step for Virgin Australia towards a supply chain for the long-term commercial use of Gevo’s sustainable aviation jet fuel to lower GHG emissions.
- Therefore, based on the above-mentioned factors, Asia-Pacific is expected to dominate the commercial aircraft aviation fuel market during the forecast period.
The commercial aircraft aviation fuel market is fragmented. Some of the major players include Exxon Mobil Corporation, Chevron Corporation, Royal Dutch Shell PLC, Total SA, and BP PLC.
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