Aviation fuel market was valued at over USD 220.1 billion in 2023 and will register 9.7 pc compound annual growth rate (CAGR) from 2024-2032, says a report by Global Market Insights (GMI), a market research and consulting company.

The report says that joint ventures and large-scale production efforts in the market have prompted aviation fuel to see a substantial spike. 

The report predicts that as companies enter into strategic alliances that aim to strengthen supply chains and improve operational efficiencies, the market will register remarkable growth.

According to the report, the aviation fuel market is set to experience significant growth and surpass USD 412.3 billion by 2032. According to the report the key factors driving this growth include rising global travel, more demand for airfreight and transition towards Sustainable Aviation Fuels (SAF).

GMI says that as global air travel continues to recover post-pandemic, with the International Air Transport Association (IATA) forecasting 4.6 billion passengers by 2030, demand for aviation fuel is increasing, particularly in regions with growing middle-class populations like Asia-Pacific.

It adds that the expansion of e-commerce and reliance on air freight for just-in-time manufacturing is pushing up fuel demand for cargo flights. This trend is key to the market’s expansion as airlines continue to grow their cargo operations.

Another factor is the modernisation of aircraft fleet by airlines which are investing in more fuel-efficient aircraft like the Boeing 787 Dreamliner and Airbus A350 to meet sustainability standards. While these aircraft consume less fuel per flight, the overall increase in air traffic continues to drive fuel demand.

The report also cites the rise of sustainable aviation fuel (SAF), which has a significantly lower carbon footprint, is transforming the aviation sector. As governments push for SAF adoption to meet carbon reduction targets, airlines and fuel suppliers are making significant investments. The International Civil Aviation Organisation’s (ICAO) CORSIA scheme is further driving this green transition by capping CO2 emissions at 2020 levels.

Challenges and opportunities

However, it is not all smooth sailing for the aviation sector, warns GMI, adding that fluctuations in crude oil prices present a challenge, as high fuel costs can increase operational expenses for airlines.

While SAF holds promise for a greener future, its current production capacity is limited. The report says that scaling up production infrastructure is essential to meet global demand and reduce costs.

Despite these challenges, the aviation industry is moving towards a more sustainable future, with SAF adoption and carbon emission targets shaping the next decade of growth.