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The aviation fuel market size is forecast to increase by USD 109 billion at a CAGR of 8.55% between 2023 and 2028. The market is experiencing significant growth, driven by the increasing focus on efficient aircraft and the launch of new aviation fuel technologies. Aerodynamic aircraft designs and the development of electric aircraft are key trends in the industry, aiming to reduce fuel consumption and operating expenses. Strategic mergers and expansions among major players in the market are also shaping the competitive landscape. However, fluctuations in oil and gas prices remain a significant challenge for the aviation fuel industry, as fuel accounts for a substantial portion of operating expenses for conventional fueled aircraft. To mitigate this challenge, players in the market are exploring alternative fuel sources and investing in research and development to improve fuel efficiency and reduce reliance on conventional fuels.
The market is driven by the increasing demand for aviation turbine fuel (ATF) and aviation gasoline (AvGas) in commercial aviation, defense aircraft aviation, and general aviation sectors. Fossil fuels continue to dominate the market due to their widespread availability and affordability. However, the rising concerns over greenhouse gas emissions have led regulatory bodies to impose stringent environmental regulations, driving the adoption of biofuels in the aviation industry. The risks of icing and the proliferating businesses in air passenger travel and short-distance travel have resulted in an increased focus on efficient aircraft designs, including aerodynamic aircraft and reduced fuel consumption.
Also, the disposable income of consumers and operating expenses of airlines are also significant factors influencing the market. The emergence of electric aircraft is another trend gaining traction in the market. Strategic mergers and acquisitions among aircraft manufacturers and fuel suppliers are expected to shape the competitive landscape of the market. Despite these trends, conventional fuelled aircraft continue to dominate the market due to their widespread usage and lower fuel cost.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The commercial segment is estimated to witness significant growth during the forecast period. The market is witnessing substantial growth due to the expanding commercial aircraft industry and the increasing global population's desire for air travel. Technological advancements in production processes and feedstock options are enabling the efficiency of biofuels and the development of advanced biofuel technologies. The scalability of these production methods is crucial for meeting the growing demand for sustainable aviation fuel. The investment in infrastructure for producing and distributing these alternative fuels is essential for reducing the carbon footprint of the aviation sector. The commercial aircraft segment, which accounts for a significant portion of the market, is experiencing a resurgence following the post-pandemic recovery of the aviation industry.
The number of air passengers has been steadily increasing since 2021, with global traffic reaching 94.1% of pre-pandemic levels in 2023, and traffic in December 2023 reaching 97%.
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The Commercial segment was valued at USD 98.60 billion in 2018 and showed a gradual increase during the forecast period.
APAC is estimated to contribute 42% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market is experiencing significant growth due to the increasing global population and the resulting growth in air travel demand. Technological advancements in production processes and feedstock options have led to the efficiency of biofuels becoming increasingly competitive with traditional fossil fuels. Advanced biofuel technologies, such as algae-based and cellulosic biofuels, offer scalability for large-scale production. Investment in infrastructure is crucial for the growth of the market, particularly in regions with high air traffic, such as North America. The matured North American aviation market, driven by the US, necessitates substantial investments in aircraft systems, leading to an increased demand for aviation fuel.
However, challenges persist, including the need for airport expansion to accommodate growing passenger numbers and the scalability of advanced biofuel production processes. Despite these challenges, the future of the market looks promising, with a focus on sustainable and efficient fuel options that reduce carbon emissions and address environmental concerns.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing focus on clean aviation fuel is the key driver of the market. The aviation industry's reliance on fossil fuels, specifically Aviation Turbine Fuel (ATF) and Aviation Gasoline (AvGas), is undergoing a shift due to several factors. These include the unpredictability of global fuel prices, the imperative of energy security, and the growing concern over aviation emissions.
Further, the depletion of fossil fuel reserves has further accentuated the demand for sustainable alternatives, such as aviation biofuels. Research and development initiatives worldwide are gradually advancing the commercialization of these renewable fuels. Moreover, stricter emission regulations, like Euro-VI in European countries, are compelling nations to adopt renewable fuels like ethanol and biodiesel in their commercial, defense, and general aviation sectors.
The launch of new aviation fuel technology is the upcoming trend in the market. The market is witnessing significant advancements with companies introducing innovative technologies to produce sustainable aviation fuel (SAF). One such development is Honeywell's UOP eFining technology, launched in March 2023, which enables the production of low-carbon SAF. This technology uses renewable feedstocks and electricity to create eFuels, a type of synthetic fuel that can replace traditional fossil fuels.
In addition, in a separate announcement in October 2022, Honeywell introduced a new ethanol-to-jet fuel (ETJ) processing technology, which converts corn-based, cellulosic, or sugar-based ethanol into SAF. These technological innovations are expected to propel the growth of the market, particularly in the commercial, defense, and general aviation sectors, during the forecast period.
The increasing focus on reducing carbon emissions and the regulatory push towards the adoption of biofuels are also contributing factors.
The fluctuations in oil and gas prices is a key challenge affecting the market growth. The aviation industry relies heavily on the availability and pricing of aviation fuels, specifically Aviation Turbine Fuel (ATF) and Aviation Gasoline (AvGas), for the operation of commercial, defense, and general aviation fleets. The price volatility of crude oil significantly impacts the market, with prolonged low crude oil prices since July 2014 leading to reduced operating costs for the downstream sector.
However, this trend poses a risk as the prices can fluctuate, increasing the input cost for airlines and ultimately affecting their profitability. The use of fossil fuels remains the primary source of aviation fuel, but the adoption of biofuels is gaining momentum due to regulatory bodies' increasing focus on reducing carbon emissions.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
BP Plc - The company offers aviation fuels such as jet fuel, avgas, UL91, and sustainable aviation fuel.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Aviation fuel is a crucial component of the global aviation industry, powering airplanes and aircraft for commercial and defense applications. The market for aviation fuel is driven by the increasing demand for air passenger travel and the proliferating businesses in the aviation sector. The market consists of two main types of fuels: aviation turbine fuel (ATF) for jet engines and aviation gasoline for piston engines. Fossil fuels, primarily petrol-based fuel, have long been the dominant feedstock for aviation fuel production. However, there is a growing trend towards the use of biofuels to reduce the carbon footprint of the aviation industry.
Technological advancements in biofuels production processes have led to the development of advanced biofuel technologies, making biofuels a viable alternative to fossil fuels. Regulatory bodies are playing a crucial role in driving the adoption of sustainable aviation fuel (SAF) by imposing environmental regulations on the aviation industry. The scalability of SAF production and investment in infrastructure for feedstock cultivation and refining facilities are key challenges for the market. The efficiency of biofuels, energy content, and risks of icing are critical factors influencing the market. The forecast period for the market is expected to witness significant growth due to the increasing living standards, disposable income, and revenue generation potential.
The market is also influenced by factors such as aircraft weight, innovative designs, efficient engines, and strategic mergers. The market is expected to face operating expenses, customer base, and fuel consumption challenges. Electric aircraft are emerging as a potential disruptor in the market.
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Market Scope |
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Report Coverage |
Details |
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Page number |
176 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 8.55% |
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Market growth 2024-2028 |
USD 109 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
7.68 |
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Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 42% |
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Key countries |
US, China, Germany, India, and Canada |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
BP Plc, Chevron Corp., Exxon Mobil Corp., Gazprom International Ltd., Gevo Inc., Honeywell International Inc., LanzaTech Global Inc., Marathon Petroleum Corp., MOL Group, Neste Corp., Oil and Natural Gas Corp. Ltd., Petroleo Brasileiro SA, PJSC LUKOIL, Shell plc, SkyNRG BV, Swedish Biofuels AB, Targray Technology International Inc., TotalEnergies SE, Valero Energy Corp., and Vitol Netherlands Cooperatief UA |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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