Westford, USA, Dec. 13, 2022 (GLOBE NEWSWIRE) -- The aviation fuel market is in a period of transition. The price of crude oil, the major feedstock for aviation fuel, has been volatile in recent years. At the same time, the demand for air travel has continued to grow, putting pressure on airlines to keep their costs low. In response, airlines have been turning to alternative fuels, such as biofuels and synthetic fuels. Aviation fuel industry will remain highly competitive. airlines are expected to continue to put pressure on suppliers to keep costs down. And, as new technologies and alternative fuels enter the market, there will be further downward pressure on prices.
In its analysis of the aviation fuel market, SkyQuest concludes that the market is in a good position to weather the current turbulence in the global economy. The demand for air travel is expected to remain strong in the long term, and airlines are well positioned to take advantage of this by expanding their networks and increasing their market share. However, the aviation fuel market is capital intensive with high barriers to entry, making it difficult for new entrants to compete. our analysis found that the industry is facing declining demand due to the COVID-19 pandemic, which has resulted in a decrease in air travel. For instance, in 2022, over 3,780 million people air travelled and the number was 4,723 million before the covid-19 outbreak in 2020. This decline in demand has put pressure on aviation fuel suppliers, who are facing reduced margins and profitability. Despite the challenges faced by the industry, there is still opportunity for growth in the market.
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The global aviation fuel market is expected to grow at a compound annual growth rate (CAGR) of 5.7% from 2022 to 2028, reaching $489.2 billion by 2028. The Asia-Pacific region is expected to be the fastest-growing market for aviation fuel, with a CAGR of 6.8% thanks to the expanding airline industry in countries such as China and India. In China, domestic air travel is expected to nearly double over the next decade, while India's domestic air travel market is expected to grow at a CAGR of 11%.
Fluctuating Crude Oil Prices Putting Pressure on Airline Operators in Aviation Fuel Market
The global aviation fuel market is a critical part of the global economy, and it is important to understand the dynamics at play. SkyQuest has extensive experience working with leading companies in the industry, and our analysis shows that the sector is facing some challenges. The first challenge is the declining demand for air travel. This has been a structural trend since the early 2020, and it has been exacerbated by the recessionary environment of the past months.
The second challenge is the high cost of fuel. Aviation fuel is one of the most expensive inputs into air travel, and airlines have been struggling to pass on these costs to passengers in the form of higher fares.
The third challenge in the aviation fuel market is the consolidation of the industry. This has been underway for some time, but it has picked up pace in recent years as airlines have looked to rationalize their networks and reduce costs. The fourth challenge is regulatory change. There has been a trend towards more stringent regulation of the aviation sector in recent years, particularly around emissions. This is likely to continue in the future, and it will put pressure on airlines to find more efficient ways to operate their businesses.
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In spite of these challenges, there are still opportunities for growth in the aviation fuel market. The demand for air travel is expected to grow in emerging markets, and there is potential for further consolidation among airlines. Regulatory change could also create opportunities for new technologies and business models that meet the needs of a more sustainable aviation sector.
Top 5 Players Generate Over 80% Revenue of Global Aviation Fuel Market
SkyQuest’s analysis also shows that the market is highly consolidated, with the top five players namely Total Energies, ExxonMobil, China Aviation Fuel, British Petroleum Fuel, and Mercury Air Group accounting for almost 80% of total demand. This gives them considerable bargaining power when negotiating with suppliers. Additionally, these companies have been able to use their scale to invest in new technology and drive down costs. Looking forward, we expect the aviation fuel market to continue to consolidation as companies look to take advantage of economies of scale. The most successful companies will be those that are able to differentiate themselves through innovation and customer service.
The largest player, ExxonMobil, has a market share of around 25%. The other major players include Shell, BP, and Chevron. These large players have some key advantages. They have significant scale and financial resources. They also have strong relationships with airlines and airports. These relationships give them some degree of control over availability and pricing of aviation fuel.
The large players also have some significant disadvantages. They are often slow to respond to changes in the market. They also tend to be inflexible in their approach to new customer requirements. There are a number of smaller players in the aviation fuel market. These companies include Jet Fuel Aviation, World Fuel Services, Phillips 66, and Sunoco. These companies typically have less scale than the large players but are often more agile and responsive to changes in the market. They also tend to be more flexible in their approach to new customer requirements. The small players typically have lower costs than the large players.
Airlines are Struggling with Potential Aviation Fuel Shortage
The global aviation fuel market is in the midst of a major crisis, with airlines struggling to secure enough fuel to meet demand. SkyQuest has released a new report that details the challenges the industry is facing and how it may need to adapt in order to survive. The market is currently "structurally short" by about 4 million barrels per day (bpd). This shortage is expected to grow to 8 million bpd by 2030.The problem is exacerbated by the fact that there are few viable alternatives to jet fuel. Airlines have thus far been able to offset some of the shortfall by using a mix of aviation gasoline and other types of fuel, but this is not a long-term solution.
Our industry analyst believes that the only way for airlines to effectively deal with the potential fuel shortage is to increase efficiency and reduce demand. This will require a fundamental change in the way airlines operate, as well as significant investment in new technology.
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Prominent Players in Global Aviation Fuel Market
- Total Energies (France)
- ExxonMobil (US)
- China Aviation Fuel (China)
- British Petroleum Fuel (England)
- Chevron (US)
- World Fuel Services (US)
- Mercury Air Group (US)
- Gazprom (Russia)
- Vitol (Europe)
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