The Asia-Pacific aviation fuel market is expected to grow at a CAGR of more than 10% over the forecast period of 2020-2025. The growth in the Asia-Pacific aviation fuel market is mainly driven by the increasing number of flights, and the increasing number of air passengers, on account of the cheaper airfare in recent times, stronger economic conditions, and increasing disposable income. However, the effect of COVID-19 pandemic, concerns related to carbon emissions, and volatile crude oil prices are expected to restrain the growth of the Asia-Pacific aviation fuel market.
- The commercial aircraft segment is expected to dominate the Asia-Pacific aviation fuel market during the forecast period.
- As the aviation industry is planning to shift to a renewable source of fuel to power its engine, biofuel has a huge opportunity in helping the aviation industry to meet the carbon emission reduction target, which in turn likely to provide an opportunity to the players involved in the market in the near future.
- China is expected to dominate in the Asia-Pacific aviation fuel market over the forecast period.
Key Market Trends
Commercial Aircraft Segment 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 total operating expenditure for an airline operator.
- In 2018, Asia-Pacific account for 34.3% of world scheduled passenger and freight traffic. On the passenger side, airlines from the Asia-Pacific led the way, with growth over the year of 9.5% in 2018.
- 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.
- As per the International Air Transport Association (IATA), in the Asia-Pacific region, four countries are expected to witness the highest passenger traffic by 2035. China is expected to witness 817 million new passengers, India is expected to witness 322 million, and Indonesia and Vietnam are expected to witness 247 million new passengers. Thus, in the region, the increase in passenger traffic is likely to rise demand for commercial aircraft segment.
- Therefore, factors such as positive trend in the air passenger traffic and freight tonnes are expected to boost the demand for aviation fuel in the commercial application over the forecast period.
China to Dominate the Market
- China is one of the largest aviation fuel markets in the region, and it is also one of the largest in terms of air passengers carried. As of the end of 2019, domestic passengers in China were the second-largest in the aviation market after the United States.
- China is the second-largest defense spending nation after the United States. The country’s Air Force has a fleet of more than 3,000 aircraft, which is expected to expand in the coming years, in turn, increasing the demand for aviation fuel.
- With close to 4 billion origin-destination (O-D) passenger journeys worldwide in 2018, domestic routes within China provided the largest incremental growth globally in the number of passenger trips, adding just under 50 million journeys.
- Hence, with an increase in domestic travel, which accounts for more than 85% of the air traffic in China, the demand for aviation fuel is expected to increase during the forecast period.
The Asia-Pacific aviation fuel market is fragmented. Some of the major players in the market include Bharat Petroleum Corp Ltd, Chevron Corporation, Vitol Holding BV, Royal Dutch Shell Plc, and China Aviation Oil Corporation Ltd.
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Table of Contents
1.2 Market Definition
1.3 Study Assumptions
4.2 Market Size and Forecast in USD, till 2025
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.6 Supply Chain Analysis
4.7 Porter's Five Force Analysis
4.7.1 Bargaining Power of Suppliers
4.7.2 Bargaining Power of Consumers
4.7.3 Threat of New Entrants
4.7.4 Threat of Substitute Products and Services
4.7.5 Intensity of Competitive Rivalry
5.1.1 Air Turbine Fuel (ATF)
5.1.2 Aviation Biofuel
5.2.1 Commercial Aircraft
5.2.2 Military Aircraft
5.2.3 General Aviation
5.3.6 Rest of Asia-Pacific
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Bharat Petroleum Corp Ltd
6.3.2 Chevron Corporation
6.3.3 Vitol Holding BV
6.3.4 Royal Dutch Shell Plc
6.3.5 China Aviation Oil Corporation Ltd
6.3.6 Pertamina Persero PT
6.3.7 Petronas Aviation Sdn Bhd
6.3.8 World Fuel Services Corp
6.3.9 BP plc
6.3.10 Exxon Mobil Corporation