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The aviation gasoline (Avgas) market size was USD 1.52 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with the aviation gasoline industry witnessing a negative demand stock across all regions amid the pandemic. Based on our analysis, this market exhibited a huge decline of -14.8% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is expected to grow from USD 1.65 billion in 2021 to USD 2.32 billion in 2028 at a growth rate of 5.0% in the 2021-2028 periods. The sudden rise in CAGR is attributable to this market’s demand and growth returning to pre-pandemic levels once the pandemic is over.
Aviation gasoline (Avgas) is primarily used for powering piston-engine aircraft. It is highly flammable at normal operating temperatures and is defined mainly by its octane rating. Several grades such as 80/87, 91/96, 100/130, 108/135, and 115/145 of Avgas were in use. However, due to diminishing demand, it has been modernized to one grade, i.e., Avgas 100/130. Growing demand for piston-engine aircraft for training purposes, sports activities, and aerial applications positively influences the growth of the market.
Decreasing Demand for Aviation Turbine Fuel Amid COVID-19 to Hinder Growth
The ongoing COVID-19 pandemic has resulted in a full-scale crisis with the imposition of travel restrictions and the suspension of flights to contain the spread of the virus. Therefore, the current demand for aviation turbine fuel (ATF) and Avgas has decreased significantly. Owing to this coronavirus outbreak, operations of several flights are down by 40%. Most of the countries across the globe are slowly unlocking their markets. Hence the demand for jet fuel is expected to stabilize gradually. But the demand for Avgas is still very low due to the restrictions on private and business aircraft. Also, training schools are closed due to Covid-19.
The price of Avgas is directly proportional to crude oil prices. Due to COVID-19, the demand for crude oil is very low; hence the price of crude oil is also subdued. This negatively affects jet fuel and aviation gasoline prices. Post Covid-19, when the demand for Jet fuel and aviation gasoline may start to recover, prices for the same will also exhibit a shift.
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Booming Business Aviation Sector to Aid Market Growth
Utilization of small aircraft for business reasons is known as business aviation. As a result, business aviation is a subset of commercial aviation that relies on the use of airplanes for commercial purposes. Several aviation companies of all sizes across the globe use different types of general aviation aircraft for business usage that fly internationally. Many companies need to provide speed, flexibility, efficiency, and productivity to compete in a marketplace. Business aviation offers multiple advantages due to its flexibility. Dassault Aviation is a French aerospace company. Business purpose powered aircraft offer time savings of around two and a half hours compared to commercial lines and provide comfort while traveling. This enables the traveler to complete the business objective quickly and smoothly. Thus, the demand for business aviation is constantly increasing across the globe. According to the National Business Aviation Association (NBAA), only about 3% of the business aircraft registered in the U.S. are flown by Fortune 500 companies. The remaining 97% are operated by a broad cross-section of organizations, including governments, charitable organizations, and businesses – large, medium, and small.
Growing Demand for Small Aircraft & Sports Activities Augment the Market Growth
The growing demand for small aircraft for sightseeing, photography, tourism, and other applications is anticipated to witness considerable growth in the global market. There is a significant increase in piston-based aircraft sales for sports activities such as aerobatics, air rallies, aeromodelling, air racing, ballooning, gliders, sailplanes, and other activities. As per General Aviation Manufacturers Association, the sale of piston-based aircraft increased from 1,137 in 2018 to 1,312 in 2020. Hence, the increase in demand for small aircraft & the growing sports activities is expected to bode well for aviation gasoline market growth during the forecast period.
Increasing Focus on Advanced Designing of Aircraft to Propel Demand
The designing of aircraft has become cheaper, safer, faster, and greener and has improved the fuel-burning efficiency, which has increased the demand for gasoline fuel. Piston-based aircraft operating on leaded Avgas contributes to air pollution, which is anticipated to endanger public health or welfare. Significant research from the Aviation industry is aiding in reducing the fuel application by delivering lighter-weight engines and hybrid-electric engines. For instance, Honeywell's efficient hybrid-electric turbogenerator aircraft propels on electricity, leading to less fuel consumption. Hence, increasing advancement in designing aircraft is expected to boost the market growth in the forthcoming years.
Increasing Preference for Hybrid and Electric Aircrafts to Restrain Market Growth
There has been significant growth in the demand for hybrid and electric aircraft owing to reduced energy consumption, emissions, and noise. Increasing energy demand and rising fuel prices have led to the development of hybrid-electric propulsion systems, which hold the potential to reduce fuel consumption in the t industry. For instance, Collins Aerospace, a technologically advanced and intelligent solution provider for the global aerospace and defense industry, has planned to invest USD 150 million over the next three years to incorporate electric architecture in existing aircraft. Hence, increasing preference for emission-free fuel for hybrid and electric aircraft restraints the market growth.
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Private End-user Segment Dominated the Market in 2020
Based on end-user, the private segment held a dominant aviation gasoline market share of the global market in 2020. An increasing number of high-net-worth individuals (HNWIs) and ultra-high net worth individuals (UHNWIs) in emerging economies, coupled with a growing preference of people opting for private aircraft to reduce their travel time, is driving the demand for private aircraft.
The commercial is the second-largest segment of the market. Growing demand for aircraft from charitable organizations and large, medium, and small businesses drives the market's growth. According to the Asian Sky Group, there were a total of 1,213 business aircraft in the Asia Pacific region by the end of 2019. China had a total 464 operational business aircraft fleet, making the country the largest business aircraft operator in the Asia Pacific.
The military segment is expected to contribute significantly in the forthcoming years. The spending on military aircraft is anticipated to be driven by several factors such as fleet replacement programs, internal and external security threats, and territorial disputes across the globe.
North America Aviation Gasoline Market Size, 2020 (USD Billion)
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North America is anticipated to lead the global market. The United States is the major consumer of Avgas. The growing number of private air travelers in the country is expected to fuel the growth of the market. According to The General Aviation Manufacturers Association (GAMA), more than 211,000 aircraft are based in the U.S., out of which more than 143,000 aircraft are piston engine aircraft. The Federal Aviation Administration (FAA) tracks active certified pilots (pilots who have their licenses and are current and eligible to fly). Of the 594,285 certificated pilots in the U.S., 211,619 are private pilots. In Canada, there are approximately 1,900 business aviation aircraft operating in every province and territory.
Asia Pacific is expected to hold the second position in the market and is likely to showcase significant growth during the forecast period due to high disposable incomes among the individual and improved living standards. In terms of revenue, Australia, China, and other Southeast Asian countries are the major contributors to the market in the Asia Pacific. As per the Asian Sky Group, China had only 2,930 at the end of August 2020. According to the Civil Aviation Administration of China (CAAC), the total number of flown hours of China's general aviation industry in 2019 was to 1.12 million hours.
Europe and Latin America are also expected to contribute significantly to the market growth during the forecast period. Latin America is an important part of business aviation. According to AMSTAT, Mexico (fleet size 988) and Brazil (fleet size 782) are the second and third largest business aircraft holders by fleet size within the Americas.
Key Players Focus on Signing New Contracts to Strengthen Their Position
The global market is consolidated owing to the strong product portfolio and a remarkable global network of major companies in developed and developing countries. Currently, ExxonMobil and Shell lead the market, accounting for a dominant share in 2020. However, strong barriers to entry are projected to the limited number of domestic players entering the global market that enables the market to be more competitive in the future.
The companies are focusing on signing new contracts to increase their revenue. For instance, in September 2020, Air BP, a specialized aviation division of BP plc, renewed its long-term contract with Cannes Mandelieu Airport in France. The company will continue to be the sole supplier of Jet A-1 and Avgas at the airport. In January 2019, Global energy leader World Fuel Services (World Fuel) secured two contracts with London Oxford Airport and London Heliport to supply Jet A-1, Avgas, and training packages. According to the company, the five-year contract is expected to commence in February 2019.
An Infographic Representation of Aviation Gasoline (Avgas) Market
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The aviation gasoline market research report provides a detailed industry analysis of the market and focuses on key aspects such as leading companies and leading end-users of the product. Besides this, the market report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market in recent years.
Volume (Thousand Tons) & Value (USD Billion)
By End-User and Region
Fortune Business Insights says that the global market size was USD 1.52 billion in 2020.
In 2020, the North American market size stood at USD 0.88 billion.
The global market is projected to grow at a CAGR of 5.0% in the forecasted period.
The private end-user segment is expected to be the leading segment in this market during the forecast period.
The global market size is anticipated to reach USD 2.32 billion by 2028, growing at a substantial CAGR of 5.0% during the forecast period (2021 – 2028).
High growth in business aviation across the globe is a major factor driving the markets growth.
The North American region dominated the market share in 2020.
ExxonMobil, Shell, BP Plc, and Total S.A. are major players in the global market.
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