Aviation Gasoline (Avgas) Market Size, Share and COVID-19 Impact Analysis, By End-user (Private, Commercial, and Military) and Regional Forecasts, 2022-2029

The aviation gasoline market size was USD 1.84 billion in 2021. The market is projected to grow from USD 1.92 billion in 2022 to USD 2.71 billion by 2029, exhibiting a CAGR of 5.0% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with Avgas experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of -14.8% in 2020 as compared to 2019.

Avgas is generally used to power piston-engine aircraft. At typical operating temperatures, it is highly flammable and is primarily determined by its octane rating. Avgas was used in many grades, including 80/87, 91/96, 100/130, 108/135, and 115/145. Due to declining demand, it has been updated to a single grade, Avgas 100/130. The growing demand for piston-engine aircraft for training, sports, and aerial applications has a beneficial impact on long-term growth.

COVID-19 IMPACT

Declining Demand for Aviation Gasoline due to COVID-19 to Impede Market Growth

The ongoing COVID-19 pandemic has triggered a full-fledged crisis in 2020, with travel restrictions and aircraft cancellations imposed to stem the virus's spread. As a result, demand for aviation turbine fuel (ATF) and aviation gas has declined dramatically. During the peak time of the pandemic, several flights have witnessed a reduction in operations due to the coronavirus outbreak. The majority of countries around the world are gradually opening up their marketplaces. As a result, demand for jet fuel is likely to normalize progressively. However, due to private and corporate aircraft restrictions, aviation gasoline consumption is still relatively low. COVID-19 has also forced the closure of training schools.

The price of aviation gasoline is linked to crude oil prices. The demand for crude oil is deficient due to COVID-19 and the price of crude oil is similarly low. This has a negative impact on jet fuel and aviation gas costs. As demand for these products begins to revive, prices for jet fuel and aviation gasoline market will likely shift after COVID-19.

LATEST TRENDS

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Growth in Business Aviation Sector to Boost Avgas Market Growth

The 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 airplanes for commercial purposes. Around 3% of private jets registered in the U.S. are flown by Fortune 500 corporations, according to the National Business Aviation Association (NBAA). The remaining 97% are run by diverse groups, including governments, nonprofit organizations, and large, medium, and small businesses. The Middle East region will require around 2,600 new aircraft over the next two decades to accommodate the region's growing population of air passengers. As a result, gasoline-based fuel industry participants are also foreseen large-scale opportunities.

DRIVING FACTORS

Increasing Demand for Small Aircraft in Sports-based Activities Accelerates Market Growth

The global aviation gasoline market is expected to increase significantly due to the growing demand for light aircraft for sightseeing, photography, tourism, and other purposes. Aerobatics, air rallies, aeromodelling, air racing, ballooning, gliders, sailplanes, and other sports activities have significantly increased piston-based aircraft sales. According to the General Aviation Manufacturers Association, the sale of piston-based aircraft climbed from 1,137 in 2019 to 1,213 in 2021. As a result, the rising demand for small planes and the growing popularity of sporting activities are likely to boost the aviation gasoline market growth over the forecast period.

Increased Concentration on Advanced Aircraft Design to Driving Market Growth

Aircraft design has gotten cheaper, safer, faster, greener, and improved fuel-burning efficiency, resulting in increased demand for aviation fuel. Piston-based aircraft using leaded aviation gasoline contributes to air pollution, jeopardizing human health and welfare. The aviation industry has done a lot of research to help reduce fuel consumption by developing lightweight engines and hybrid-electric engines. For example, Honeywell's efficient hybrid-electric turbogenerator aircraft uses energy to propel itself, resulting in lower fuel usage. As a result, increased improvement in aircraft design is likely to promote market growth in the coming years.

Although there are several ASTM Standards for Avgas, practically all Avgas on the market in the U.S. today are low lead, 100 MON Avgas (100LL). This grade meets the needs of all Avgas-powered piston engines, propelling the market expansion.

RESTRAINING FACTORS

Growing Preference for Hybrid and Electric Aircraft Will Restrain Market Growth

The development of hybrid-electric propulsion systems, which can cut fuel consumption in the aviation industry, has been prompted by increased energy demand and rising fuel prices. In March 2020, Collins Aerospace, a technologically advanced and intelligent solution supplier for the worldwide aerospace and defense industry, announced USD 150 million investment over the next three years to incorporate electric architecture into existing aircraft. As a result, the market growth is constrained by the growing choice for hybrid and electric aircraft emission-free fuel.

Electricity is the cheapest and easiest to produce of the three. Each operational hour of a single electric flight costs USD 4-6. In comparison, aircraft fuel costs between USD1,000 and USD2,000 every operating hour. Compared to Avgas, electric planes are more cost-effective, environmentally friendly, and comfortable for passengers

SEGMENTATION

By End-user Analysis

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Private Segment Dominated Global Market in 2021

The private segment dominated the market in terms of end-user during the forecast period. The demand for private aircraft is being driven by an increase in the number of high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) in emerging economies and a growing desire for people choosing private aircraft to shorten their trip time.

The commercial sector is the market's second-largest section. The market is growing due to increased demand for airplanes from philanthropic organizations and large, medium, and small businesses. According to the Asian Sky Group, Asia Pacific will have 1,314 business aircraft by the end of 2021. China has 733 operational business aircraft, Asia Pacific's most prominent business aircraft operator.

In the coming years, the military sector is likely to contribute considerably. Several variables, including fleet replacement programs, internal and external security concerns, and territorial disputes worldwide, are expected to drive military aircraft spending.

REGIONAL INSIGHTS

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North America is anticipated to lead the global market. The U.S. is the major consumer of Avgas. The country's expanding number of private aviation travelers is likely to propel the market's expansion. According to the General Aviation Manufacturers Association (GAMA), the U.S. is home to more than 211,000 aircraft, more than 143,000 of them being piston-engine aircraft. The Federal Aviation Administration (FAA) keeps track of licensed pilots currently flying (pilots who have their licenses and are current and eligible to fly). Private pilots account for 211,619 of the 594,285 certificated pilots in the U.S. Every province and territory in Canada has around 1,900 business aviation aircraft.

Asia Pacific is predicted to hold the second-largest position and develop significantly during the forecast period. Australia, China, Japan, and other Asia Pacific countries held the largest share of disposable incomes. China had only 2,930 private jets at the end of August 2020, according to the Asian Sky Group. According to the Civil Aviation Administration of China (CAAC), the total number of flown hours in China's general aviation industry in 2021 was 1.12 million hours.

Europe is witnessing emerging opportunities in the global market. Emerging economics in European airlines have successfully obtained government assistance – significant assistance in the case of Lufthansa and Air France-KLM- allowing them to continue operating. More airlines are turning to government-backed subsidies as the outbreak lingered until 2021.  In 2021, the airline expected to use a smaller short-haul network with a fleet of 50 narrow-body aircraft, which it will expand to roughly 70 narrow-body aircraft in 2022.

Latin America holds a significant share in the global market, and Mexico (fleet size 988) and Brazil (fleet size 782) are the second and third largest business aircraft owners in the Americas, respectively, according to AMSTAT.

The Middle East and Africa will hold a substantial share in the global market. Oxford Economics estimates that by 2036, the impact of air travelers and the tourism sector it facilitates in Middle Eastern countries will have grown to support 4.3 million jobs (78% more than in 2016) and USD 345 billion contribution to GDP (166% increase).

KEY INDUSTRY PLAYERS

Key Players Prioritize Contract Extensions to Strengthen their Position

Despite a broad product portfolio and a spectacular global network of large corporations in developed and developing nations, ExxonMobil and Shell will hold a substantial market share during the forecast period. However, small number of local competitors joining the global market is expected to create high entry barriers, allowing a competitive landscape in the future.

To increase revenue, major companies are concentrating on negotiating new contracts. For example, in January 2021, World Fuel Services (World Fuel), a global energy provider, won two contracts to supply Jet A-1, Avgas, and training packages to London Oxford Airport and London Heliport. The firm's five-year contract was projected to begin in February 2021.

LIST OF KEY COMPANIES PROFILED:

• ExxonMobil (U.S.)


• Shell (Netherlands)


• BP Plc (U.K.)


• Total (France)


• Repsol (Spain)


• Vitol Group (U.K.)


• Phillips 66 (U.S.)


• Indian Oil Corporation Limited (India)


• Naftal (Algeria)


• Hjelmco Oil AB (Sweden)

KEY INDUSTRY DEVELOPMENTS:

• In January 2020, Air BP Plc's specialized aviation branch renewed its cooperation with BAA Training, one of Europe's foremost independent aviation training institutes. Air BP will supply Avgas 100LL aviation fuel and unleaded Avgas to all BAA Training aircraft bases and other Spanish airports to facilitate the delivery of BAA Training's training programs.


• In May 2020, Hjelmco reduced prices for all Avgas varieties by 40 ore/liter and for JET-A1 by 60 ore/liter. A sharp reduction in price for the supply of crude oil in April 2020 and its production has increased significantly.

REPORT COVERAGE

An Infographic Representation of Aviation Gasoline (Avgas) Market

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The market report provides a detailed industry analysis of the market and focuses on key aspects such as leading significant companies and end-users. Besides, the report offers insights into the aviation gasoline 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.

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