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The Defense Aircraft Aviation Fuel Market size is estimated to increase by USD 18.47 billion and grow at a CAGR of 5.95% between 2023 and 2028. The market is experiencing significant growth, driven by several key trends and factors. One of the primary growth drivers is the increasing use of military Unmanned Aerial Vehicles (UAVs), which rely heavily on aviation fuel and fuel cells for operation. Additionally, the demand for jet fuel in the defense sector, especially in military UAV, continues to rise due to the expansion of military fleets and the replacement of older aircraft with more fuel-efficient models. Another significant factor influencing market growth is the volatility of crude oil prices, which directly impacts the cost of aviation fuel. Despite these challenges, the Defense Aircraft Aviation Fuel market is expected to continue its growth trajectory, driven by the increasing importance of air power in military operations and the ongoing modernization of military fleets.
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The air turbine fuel (ATF) segment will account for a major share of the market's growth during the forecast period. ATF is a crucial component in the global market. Such sustainable fuel shall be used to drive military aircraft, such as fighter jets, transport planes, and helicopters. The aviation fuel market for defense aircraft is a crucial sector, playing an important role to ensure the readiness of military forces worldwide.
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The air turbine fuel (ATF) segment was valued at USD 26.78 billion in 2018 and continued to grow until 2022. ATFs are designed to take into account the demanding requirements of Military Aircraft such as High Pressure and High Temperature. It has low flash points and a high energy density, making it the most suitable fuel to use in modern military aircraft engines. It is also designed to tolerate extreme weather conditions, which is essential for aircraft used in military operations. In addition to its functional benefits, ATF is also crucial for national security. Hence, such factors are fuelling the growth of this segment during the forecast period.
Based on application, the market has been segmented into Surveillance aircraft, Civil aircraft, and others. The global market is seeing an increase in demand for surveillance aircraft. By gathering intelligence and surveillance data, such aircraft are playing an important role in the defense sector. The surveillance aircraft segment is expected to grow significantly in the coming years due to increasing security concerns across the globe. The surveillance aircraft segment includes manned surveillance aircraft and helicopter and combat reconnaissance aircraft. Hence, such factors are fuelling the growth of this segment during the forecast period.
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North America is estimated to contribute 34% to the growth by 2028. Technavio's analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. Aviation fuel research and development infrastructure are also well-developed in the region. Two of the major organizations that carry out research in this field are the Defense Advanced Research Projects Agency (DARPA) and the US Air Force Research Laboratory (AFRL). They are working on cutting-edge fuel technologies that could improve the performance and efficiency of military aircraft. Hence, such factors are driving the market in North America during the forecast period.
Our analysis of the adoption life cycle of the market indicates its movement between the innovator's stage and the laggard's stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2024 to 2028.
Global Market Customer Landscape
The airline industry is making strides towards reducing CO2 emissions by adopting Sustainable Aviation Fuel (SAF). SAF, derived from biomass, aims to be carbon-neutral and lower the environmental impact of commercial passenger traffic. Key considerations for SAF include energy content, combustion quality, and lubricity, ensuring it meets standards for impurities like sulfur dioxide and particulate matter. Hybrid vehicles and advancements in AI and Artificial Intelligence are also contributing to greener solutions. The integration of IoT and big data analytics helps optimize fuel usage and reduce emissions. Investments in infrastructure are crucial for supporting SAF production and distribution. Additionally, ensuring non-corrosiveness and effective performance in hydraulic fluid and coolant applications is essential for the overall efficiency and safety of aviation operations. Various types of aerospace and defense fuel, including Avgas, aviation gasoline, and kerosene-based blends, serve the diverse needs of commercial aircraft and internal combustion engines.
The surging utilization of military UAVs is fueling the expansion of the market. Unmanned aerial vehicles (UAVs) are witnessing increased adoption across various military applications, ranging from surveillance and reconnaissance to critical missions. Their integration into defense operations aims to streamline military activities, enhancing efficiency and security on the battlefield.
Consequently, the demand for aviation fuels, including jet fuel, is witnessing an upswing to support the operations of these UAVs. Moreover, geopolitical tensions between nations are further propelling the demand for UAVs, thus driving the growth of the defense aircraft aviation fuel market. This trend underscores the vital role of aviation fuel in sustaining military operations and security efforts worldwide.
The increase in demand for jet fuel is a primary trend in the market. The rising number of military aircraft has resulted in an increase in demand for jet fuel. This increase in demand continues to have a significant impact on the aviation fuel industry. The need for jet fuel has been consistently rising as more countries around the world invest in their air forces. Military aircraft require a considerable amount of jet fuel for their operations. The geopolitical climate in various parts of the world has prompted countries to increase their military capabilities. The rising tensions between nations have enforced the need for more advanced military aircraft. As a result, there has been a considerable increase in demand for jet fuel as more nations invest in their defense capabilities.
Moreover, the aviation fuel industry has had to adapt to meet the increasing demand. Refineries have had to increase production levels to meet the fuel requirements of the military. The companies are leveraging new technologies, turning resources such as domestic garbage, alcohol, carbon from the atmosphere, and sewage into jet fuel on a commercial scale, promising emissions savings of more than 70% when compared to traditional fossil jet fuel. Thus, the above-mentioned factors are expected to propel the adoption of jet fuel, which is expected to fuel the growth of the global market during the forecast period.
The fluctuation in crude oil prices is a major challenge for the market. The oil price is a determining factor for aviation, with the success or failure of its operation depending on what it fetches. The price of crude oil has been decreasing for a long time since July 2014. The prices have declined continuously due to a supply-demand imbalance. The revenues of upstream oil and gas companies have decreased, which has directly affected their cash flow. For the downstream sector, the cost of raw materials, crude oil, was reduced, which decreased their operating cost substantially and increased the profit margin for companies.
However, volatility in crude oil prices is a major risk for airlines. As a result of higher oil prices, the cost of petroleum input increases for the upstream sector and this leads to an increase in airfares. Moreover, during the phase of low crude oil prices, operating costs for the aviation industry were reduced. With the drop-in aviation fuel prices, air carriers' profitability is increasing and their fares are falling. As a result, the demand for air travel grew and this led to an increase in airline capacity. The decrease in crude oil prices has reduced the focus on investments in alternative aviation fuels. Such factors can hinder the growth of the global market during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
BP Plc - The company offers defense aircraft aviation fuel such as Jet A-1.
Chevron Corp. - The company offers defense aircraft aviation fuel through its subsidiary GS Caltex.
We also have detailed analyses of the market's competitive landscape and offer information on 15 market players, including:
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The aviation industry is undergoing significant changes to address carbon emissions and GHG emissions. IATA is promoting decarbonization through the adoption of electric propulsion and renewable fuels, such as bio jet fuel and biokerosene. These renewable fuels are crucial for reducing greenhouse gas emissions compared to conventional aviation fuel. Despite the price difference and production cost, offtake agreements and regulatory pressures are driving the shift toward more sustainable alternatives. ASTM D4054 sets standards for fuel type and stability, ensuring that bio jet fuel and other renewable fuels meet performance criteria.
Moreover, commercial airlines and private aircraft alike are affected by fuel price fluctuations, influenced by Brent crude oil rates and air travel demand. Investments in fueling infrastructure and airport expansion support the transition, while digital connectivity and the Internet of Things enhance infrastructure investments. This shift not only promotes environmental sustainability but also supports sports tourism and other sectors, reinforcing the need for energy diversification.
Market Scope |
|
Report Coverage |
Details |
Page number |
165 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.95% |
Market growth 2024-2028 |
USD 18.47 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.53 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 34% |
Key countries |
US, China, Germany, Japan, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
BP Plc, Chevron Corp., Exxon Mobil Corp., Gevo Inc., Honeywell International Inc., Indian Oil Corp. Ltd., LanzaJet Inc., Marathon Petroleum Corp., MOL Group, Neste Corp., Petroleo Brasileiro SA, PJSC LUKOIL, Repsol SA, Shell plc, SkyNRG BV, Swedish Biofuels AB, TotalEnergies SE, Valero Energy Corp., and Vitol Netherlands Cooperatief UA |
Market dynamics |
Parent market analysis, Market forecasting ,market report , Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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