Market Trends of Europe Aviation Fuel Industry
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, accounting for a quarter of an airline operator's total operating expenditure.
- In 2023, commercial aviation dominated the skies, accounting for 91.9 percent of total flights, reflecting its critical role in European air travel. General aviation contributed 6.5 percent, serving niche markets and private travel needs. While minor, defense aviation still played a vital role, with 1.6 percent of total flights.
- The European commercial aviation fuel market is witnessing robust growth, fueled by a resurgence in air travel and a strong emphasis on sustainable aviation solutions. Major European countries, including Spain, the United Kingdom, and France, are witnessing a tourism boom, leading the commercial sector to capitalize on rising passenger numbers.
- Post-COVID-19, global travel and tourism have rebounded, driven by affordable airfares and improved economic conditions, leading to a surge in air travel demand. This uptick in flight demand has, in turn, increased fuel consumption in the commercial aviation sector.
- Eurostat Data highlights that in Q1 2024, EU air carriers transported 198 million passengers, an 11.5% increase from Q1 2023. February 2024 was particularly notable, with passenger numbers exceeding February 2019 figures for the first time since the pandemic, marking a 1.0% uptick. In Q1 2024, international extra-EU transport made up 50.1% of all passengers within the EU. Given the nationwide tourism surge, the region's aviation fuel demand is poised for significant growth in the coming years.
- Moreover, Europe's tourism upswing, especially in hotspots like Italy and Spain, signals a sustained growth trajectory for fuel demand. As the aviation sector rebounds and new flight routes emerge, this growth is set to accelerate.
- In September 2024, Delta Air Lines announced the addition of seven new European routes, expanding its transatlantic schedule for summer 2025. This expansion includes four new services to Italy, alongside routes from Boston to Barcelona, Detroit to Dublin, and Atlanta to Brussels. With such an expansion in tourism and aviation networks, the demand for aviation fuels is anticipated to rise.
- Therefore, based on the above mentioned points, the commercial sector is expected to dominate the market.
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The United Kingdom to Dominate the Market
- The United Kingdom’s aviation sector is a cornerstone of its economy, ranking among the largest in Europe. Substantial investments in airport infrastructure and a strong tourism industry support the aviation market in the United Kingdom, contributing to its robust performance.
- In 2023, the United Kingdom had the highest average number of daily flights, at 5290, a 13 percent increase from 2022. Spain was the second busiest, with 4616 flights per day, up 9 percent, followed by Germany, with 4532 flights per day, up 7 percent. Due to this, the demand for aviation fuel in the UK is substantial, driving growth in the European aviation fuel market.
- The country's aviation fuel market is expected to grow significantly during the forecast period, mainly driven by increasing tourism, global geopolitical conditions, domestic air traffic, and mainly by government policies.
- For instance, in April 2024, the United Kingdom government announced that by 2030, 10 percent of all jet fuel must come from sustainable sources. This move aims to cut greenhouse gas emissions and boost the sustainable aviation fuel (SAF) industry, potentially adding over 1.8 billion British Pounds to the economy and creating more than 10,000 jobs.
- Furthermore, the United Kingdom government allocated 135 million British Pounds through the Advanced Fuels Fund to support 13 groundbreaking SAF projects nationwide. This funding aims to accelerate the development and production of sustainable aviation fuels.
- Therefore, due to the factors above, the United Kingdom is expected to dominate the market in the aviation fuel sector during the forecast period.
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