Middle-East and Africa Commercial Aircraft Aviation Fuel Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The commercial aircraft aviation fuel market in the Middle-East and Africa is expected to grow at CAGR of more than 13% in the forecast period of 2020-2025. The increasing number of air passengers, on account of the cheaper airfare in recent times, stronger economic conditions, and increasing disposable income are some of the major driving factors for the market. However, the recent outbreak of COVID-19 tremendously affected the consumption of aviation fuel. With the closure of international and domestic airlines to curb the spread of the virus, the demand for aviation fuel is expected to decline during the pandemic.

Key Highlights

• With increasing concerns over emission from aviation sector, aviation biofuel is expected to witness significant growth during the forecast period.
• Countries in the Middle Eastern region need over 2,600 new aircraft in the next 20 years, to cater to the increasing number of air travelers in the region. With this, large scale opportunities are expected for the aviation fuel market players also.
• With the largest market size in the Middle-East and Africa, the United Arab Emirates is leading the market in the region. With forecasted growth, the nation is likely to continue its dominance during the forecast period as well.

Key Market Trends

Aviation Biofuel to Witness Significant Growth

• Aviation biofuel is expected to witness significant growth during the forecast period, owing to factors like rising environmental awareness and stricter regulations on the aviation sector, in a bid to control emissions from the industry.
• In January 2019, Etihad Airways emerged as the first airline to fly a passenger flight using a biofuel made from plants grown in a desert. The flight from Abu Dhabi to Amsterdam used biofuel derived from a plant named Salicornia bigelovii, which grows in brackish water, and was fertilized using fish.
• In July 2018, the oil-producing nation, Saudi Arabia, proposed to the extension of the scope of sustainable aviation fuel (SAF) to include fossil fuels, if they demonstrate at least a 10% reduction in lifecycle CO2 emissions to the International Civil Aviation Organization (ICAO).
• Thus, the ongoing research and development activities and the government initiatives for increasing biofuel in the aviation industry are expected to drive the studied market during the forecast period. Though the cost of biofuel blended jet fuel is relatively high right now, commercialization and more R&D is expected to make biofuel cheaper in the future.
• All of the above factors are expected to help aviation biofuel grow significantly in the region during the forecast period.

The United Arab Emirates to Dominate the Market

• The United Arab Emirates' (UAE's) national carriers fly to 108 countries and 224 cities around the world, and the value of the UAE’s investments in the aviation sector amounted to USD 270 billion, as of October 2019 (ICAO).
• The United Arab Emirates is among the leading countries in terms of the number of passengers passing through the national airports in 2018, accounting for 134 million passengers, with Dubai Airport ranking first, globally, in terms of the number of passengers in 2018, with over 89 million passengers (Dubai Statistics Centre).
• Moreover, once the Al Maktoum International Airport in Dubai is completed, it is expected to emerge as the largest airport in the world, with a capacity of up to 160 million passengers and 12 million metric tons of air freight volume annually.
• A total of 883,000 flights were handled by Emirati airports, with Dubai Airport ranking sixth, globally, in terms of shipment, transporting 68.65 million kg of goods (Dubai Airport Factsheet). The United Arab Emirates has one of the largest fleets of Boeing aircraft in the world, with 191 aircraft, and it also has 119 Airbus 380 aircraft. Its four national carriers have approximately 498 aircraft.
• In January 2019, Etihad Airways emerged as the first airline to fly a passenger flight using a biofuel made from plants grown in a desert. The flight from Abu Dhabi to Amsterdam used biofuel derived from a plant named Salicornia bigelovii, which grows in brackish water, and was fertilized using fish.
• However, the COVID-19 pandemic led to travel restrictions for flights to and from the United Arab Emirates. In the period between April-June 2020, the number of scheduled flights was about 79% less compared to the previous year (OAG). Hence, the demand for aviation fuel decreased, in turn, impeding market growth.

Competitive Landscape

The Middle-East and Africa commercial aircraft aviation fuel market is moderately fragmented. Some of the major companies include Emirates National Oil Company, Chevron Corporation, Royal Dutch Shell PLC, Total SA, and Abu Dhabi National Oil Company.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support