North America Aviation Fuel Market

North America Aviation Fuel Market Analysis

The North America Aviation Fuel Market is expected to register a CAGR of greater than 15% during the forecast period.

The market was negatively impacted by the outbreak of COVID-19 due to regional lockdowns and flight restrictions. Currently, the market has reached pre-pandemic levels.

• The increasing number of air passengers, on account of the cheaper airfare in recent times, stronger economic conditions, and increasing disposable income, are among the major driving factors for the market.
• However, the high and volatile cost of aviation fuel is expected to restrain the market.
• The air passenger number is expected to touch 8.2 billion by 2037. North America is expected to hold a significant share in this, creating ample opportunities for market players.
• The United States is leading the market in the North American region. With forecast growth, the United States is likely to continue its dominance.

North America Aviation Fuel Market Trends

Commercial Sector to Dominate the Market

• Commercial aviation includes operating scheduled and non-scheduled aircraft, which involves commercial air transportation of passengers or cargo. The commercial segment is one of the largest consumers of aviation fuel, and it accounts for a quarter of the total operating expenditure for an airline operator.
• The market share is dominated by the commercial sector in 2021 in North America, followed by general aviation and defense, respectively.
• As of 2021, aviation fuel accounted for more than 20% (IATA) of the total expenses for commercial airlines. Hence, as the number of passengers is increasing on commercial flights, the demand for aviation fuel is expected to increase, in turn driving the market studied during the forecast period.
• In 2021, the total number of passengers carried by commercial airlines rose to around 4.54 billion, which was 5.58% higher than in 2020.
• In December 2021, Aemetis signed a USD 2.1 billion sustainable aviation fuel supply agreement with Delta Air Lines to supply approximately 250 million gallons under a 10-year agreement. In addition to America, Aemetis has also signed memorandums of understanding to supply 280 million gallons for delivery to the San Francisco Airport.
• Therefore, due to the aforementioned factors, the commercial sector is expected to dominate the market during the forecast period.

The United States to Dominate the Market

• The defense sector consumes a large amount of aviation fuel. For instance, on average, the US Air Force consumes approximately 4.8 billion gallons of aviation fuel annually, about 81% of the total Air Force energy budget. Nearly half of that goes to the Air Force and around one-third to the Navy. Therefore, as the budget increases for the defense sector, the air force fleet is expected to increase, positively affecting the aviation fuel market.
• As part of the United States Air Force's goal of achieving half of its domestic fuel needs drawn from alternative sources, the military and commercial airlines tested alcohol-to-jet (ATJ) fuel on A-10 ground attack aircraft. Moreover, companies such as Honeywell use this renewable jet fuel process technology for the US Navy and Air Force.
• General Aviation included a total of 440,000 general aircraft flying worldwide (GAMA) as of 2021, ranging from two-seat training aircraft and utility helicopters to intercontinental business jets. Over 211,000 general planes are based in the United States, which makes the nation dominate the sector.
• According to the Airlines for America (A4A), in 2021, the country's airlines carried 2.9 million passengers worldwide daily, which was an all-time high number of passengers in the country's airline history.
• Moreover, 58,000 metric tons of cargo per day were ferried by the country's airlines in 2021 (A4A). Therefore, the country's robust growth in air travel and cargo volumes has resulted in higher demand for aviation fuel in past years.
• In March 2022, Aemetis Inc announced that it had made an agreement with Qantas Airways Limited to supply 20 million liters of blended aviation fuel from 2025. The blended fuel will be produced at a facility in California and will primarily be used to power Boeing and Airbus planes being operated between the countries.
• Therefore, due to the aforementioned factors, the United States is expected to dominate the market during the forecast period.

North America Aviation Fuel Industry Overview

The North American aviation fuel market is moderately fragmented. Some of the major companies (in no particular order) include Exxon Mobil Corporation, BP PLC, Shell PLC, TotalEnergies SE, Chevron Corporation, and others.

North America Aviation Fuel Market Leaders

North America Aviation Fuel Market News

• May 2022: United Airlines became the first United States airline to sign an international purchase agreement for sustainable aviation fuel (SAF). The airline has signed a new purchase agreement with Neste that provides United the right to buy up to 52.5 million gallons over the next three years.
• September 2022: The U.S. Energy Department issued a plan detailing a government-wide strategy for ramping up the production and use of sustainable aviation fuels (SAF).