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Aviation Lubricant Market Overview
Aviation
Lubricant Market size is estimated to reach US$3.3 billion by 2027 after growing at
a CAGR of 7.5% from 2022-2027. Aviation Lubricants are the chemical compounds
that provide a fluid barrier between various parts of an aircraft and are used as
engine oil, hydraulic fluid, piston engine oil and grease, etc. in aircraft. Hence,
these lubricants are either mineral-based which is derived from crude oil, or
synthetic-based derived from petroleum, but the most common lubricants used in
aircraft are calcium sulfonate and perfluoropolyether which are both synthetic
based. Hence drivers for the aviation lubricant market include, an increase in the volume
of air passenger traffic, an increase in the number of air fleets by airlines,
increase in usage of effective aircraft engines such as turbofans engine.
However, the major challenge in the aviation lubricant market is that, as the
aviation lubricants are derived from crude oil, hence the fluctuating price of
crude oil disrupts the manufacturing of lubricants. Hence such disruptions
caused by price fluctuation have hampered the growth of the aviation lubricant
industry.
COVID-19 Impact
COVID-19 pandemic had negatively impacted the aviation
lubricant market on a global level, as the restrictions and lockdown imposed by
governments all across the globe caused a shortage of labor, decrease in the
supply of spare parts due to import-exports restriction, and shutdown of
various production plants. Hence all this hampered the productivity of the
aerospace sector and reduced the demand for new aircraft. For instance, as per
the 2021 report of the General Aviation Manufacturers Association, the Global business jet deliveries declined 20.4%
to 644 aircraft in 2020 due to the COVID-19 pandemic. As per the 2021 finance
report of Boeing, the company saw 40% less funding towards new aircraft
deliveries in 2020 compared to 2019, and also the company reduced production of
aircrafts 787s & 777s while halting production of 737max. Reduction in the
demand and production of new aircraft and halting of maintenance work due to
labor shortage reduced the demand for lubricants like grease, engine oil, hydraulic
fluids that are used in such aircraft. Hence such reductions in demand
negatively impacted the growth of the aviation lubricant industry. However, the
industry slowly recovered from the pandemic through government support, debt
sales, and cost reduction actions.
Report Coverage
The report: “Aviation Lubricant Market –
Forecast (2022 – 2027)”, by IndustryARC, covers an in-depth analysis of the
following segments of the Aviation Lubricant Industry.
By Product Type – Grease,
Hydraulic fluid, Engine Oil, Turbine Oil, Cum Pressure Oil, Special Lubricant
& Additives, Others
By Lubricant Type - Synthetic,
Mineral based
By Aviation Type – Commercial,
Military, General, Helicopter, Others
By Application Type – Hydraulic
system, Engine, Landing gear, Airframe, others
By End User – Original
Equipment Manufacturer (Engine cases, Combustor Components, Bearing Housing,
Vanes, Manifold, Shaft nuts & gears, Others), Maintenance Repair Overhaul
(Rotating components, Stationary seals, Frame & Casings)
By Geography - North America (USA, Canada, Mexico),
Europe (UK, Germany, France, Italy, Netherland, Spain, Russia, Belgium, Rest of
Europe), Asia-Pacific (China, India, Japan, South Korea, Australia, and New
Zealand, Indonesia, Taiwan, Malaysia, Rest of APAC), South America (Brazil,
Argentina, Colombia, Chile, Rest of South America), Rest of the World (Middle
East, Africa)
Key Takeaways
- Investments in new-generation aircraft especially in the commercial aircraft segment are continuously growing especially in developing markets such as India. Hence with such an increase in investments in aircraft, the demand for lubricants to be used in them will also increase.
- Liquid lubricant is pumped throughout the engine to the parts that require lubrication and reduction of friction during engine performance increase the potential power output. Hence due to reason lubricants have high applicability in aircraft engines.
- North America dominates the aviation lubricant market as the region has U.S and Canada is one of the major aircraft manufacturing countries showing a significant increase in their air commute, new orders for aircraft and components.
Figure: North America Aviation Lubricant Market Revenue, 2021-2027
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Aviation Lubricant Market Segment – By Product
Engine oil held the largest share in the aviation lubricant market in 2021, with a share of over 40%. This owns to factor like high consumption of engine oil during the flight hours as they can be circulated readily and when engine parts are in constant friction the engine oil lubricates them and prevents wear & tear of parts. The increasing usage of advanced engines like turbofan engines in aircraft has positively impacted the demand for engine oil in them. For instance, in January 2021 the U.S carrier Frontier Airline ordered 134 new fleets of A320s powered by geared turbofans engines (GTF) PW1100Gs made by Pratt & Whitney. Moreover, in 2021 the leap turbofan engines 1A & 1B made by CFM International were majorly used in Boeing 737MAX and Airbus320s. Hence with the usage of such advanced turbofan engines, the demand for efficient engine oil like synthetic based oil that would enable these engines to function well at high temperatures will also increase. Such an increase in engine oil usage will create more demand for aviation lubricants, thereby positively impacting the growth of the aviation lubricant industry.
Aviation Lubricant Market Segment – By Lubricant Type
Synthetic lubricant held the largest share in the aviation
lubricant market in 2021, with a share of over 35%. This owns to factors like
synthetic lubricants like perfluoropolyether
and calcium sulfonate provides good thermal-oxidative stability, good deposit
control capability and due to low volatility provides superior performance. Hence
synthetic lubricants enable jet engines to operate at high temperatures. With
the airline companies increasing their aircraft strength to meet the increasing
traveling scale of air passengers, hence the necessary amount of lubrication
would be required to keep such aircraft in working condition. For instance, in
June 2021 the American Airlines order 50 Airbus A321XLR aircraft which would
create new opportunities in domestic as well as international markets for the
company. Moreover, in 2021, the United Airline ordered 270 new aircraft of
which 200 were Boeing MAX jets and 70 were Airbus 321neos. Hence with such an increase
in the demand for aircraft from major airline companies the demand for high-performance
synthetic lubricants like perfluoropolyether will also increase.
Aviation Lubricant Market Segment – By Aviation Type
Commercial aviation held the largest share in the aviation
lubricant market in 2021, with a share of over 45%. This owns to factors like increase
in the production rate of heavy aircraft commercial airliners in major aircraft
manufacturers like Airbus, Raytheon Technologies, United Aircraft Corporation,
Boeing, etc. owing to an increase in domestic and international traveling
volume, especially in emerging economies like India. For instance, in 2021,
Boeing delivered 79 commercial aircraft in the second quarter compared to 20
deliveries in 2020, showing an increase of 79%, while Airbus delivered 172
aircraft in the second quarter in 2021 compared to 72 in 2020, showing an
increase of 54%. Hence with the increase in the demand for a commercial
airliner, the demand for effective lubricants like calcium sulfonate that is
used in engine oil, transmission fluids, gear oil, etc. will also increase.
thereby showing a positive impact on the aviation lubricant market.
Aviation Lubricant Market Segment - By Application
The engine held the largest share in the aviation lubricant
market in 2021, with a share of over 35%. With commercial air transport rapidly
developing in various emerging markets like China, India, etc. the demand for
new and efficient aircraft models has increased. Hence this has raised the
demand for an efficient engine like turbo engines that would be used in these
aircraft. For instance, in 2021 the CFM International a leading aircraft engine
manufacturer sold a total of 3605 leap turbofan engines of which 1362 were
leap-1B engines delivered to Boeing for 737MAX and 2243 were leap-1A delivered
to Airbus for its fleet of A320neo. Hence total unit sold in 2021 was 67%
higher than the total units sold in 2019 i.e., 2148 units. Moreover, the Q3
sales of Pratt & Whitney for jet engines in 2021 increased up to 25%. Hence
as the usage of advanced turbo engines increases, the demand for lubricants
like engine oil and grease will also increase, thereby increasing the demand for
the aviation lubricant market in this segment of the application.
Aviation Lubricant Market Segment – By End User
Maintenance repair overhaul held the largest share in the aviation
lubricant market in 2021, with a share of over 40%. The maintenance work consists
of base maintenance, line maintenance, and different level checks which an
aircraft goes through during its lifetime. To ensure that the aircraft flies
efficiently without facing any issue, maintenance work is considered a
necessary step. Hence this has led to the creation of agreements between
aircraft companies and manufacturers. For instance, in October 2021 Finnair entered
in a Flight Hour Service (FHS) maintenance contract with Airbus which would
provide parts availability and maintenance to the operators of 35 aircraft of
A320s, also the company signed 11 maintenance contracts in the First half of
2021. Moreover, in 2020, MTU aero engines entered into an engine repair
contract with Air Serbia to provide spare parts and repair work to its Airbus A320
family fleet. Hence as the maintenance contract of such major aircraft
manufacturers increases, this would lead to an increase in usage of lubricants
used during the maintenance work. Hence such an increase in usage will
positively impact demand for aviation lubricants in such aircraft
manufacturers.
Aviation Lubricant Market Segment – By Geography
North America held the largest share in the aviation lubricant market in 2021, with a share of over 30%. This owns to factor like the region being a hub for major aircraft manufacturing companies like Boeing, Embraer in U.S and Bombardier in Canada, and also the region consists one of the largest shares of the world domestics passengers. For instance, as per recent reports by International Civil Aviation Organization, in 2021, North America overtook China with a 30% share of world domestic passengers. Also, Boeing delivered 79 commercial jets in Q2 of 2021 compared to 20 from 2020, moreover, the company received gross order of 317 aircraft of which 200 were 737 MAX narrow bodies, 18 of 767s, 13 777s, and 5 of 787s. Hence with a growing number of airline passengers, the demand for more aircraft especially commercial aircraft has increased which has positively impacted the demand for aviation lubricants in the U.S and Canadian aviation market.
Aviation Lubricant Market Drivers
Increase in volume of aircraft production
Hence with the increase in demand for defense & commercial aircraft and their components in the regions like Europe & North America has led to an increase in the production volume of major aircraft manufacturers like Airbus & Boeing. For instance, in 2021 Airbus increased the production rate of A320 Family aircraft from 43 aircraft in Q3 to 45 in Q4 in the production plant in France, Germany, Toulouse, and it increased the monthly production rate of A322 from 5 to 6 aircraft per month in Montreal, Quebec, Mobile. Also in 2020, Boeing was the major producer of wide-body planes with a total unit of 224 followed by Airbus 147 units. Hence with such an increase in the production of major aircraft manufacturers, the aviation lubricant like perfluoropolyether to be used in them would also increase thereby positively impacting the aviation lubricant industry in terms of lubricant demands.
Increase in usage of turbofan engines
Modern engines in terms of
reliability and efficiency depend directly on the effectiveness of the
lubricating system. lubrication is responsible for cooling internal parts of
the engine which are acting relative to each other creating friction and heat
which results in overheating. The introduction of advanced turbofans engines by
major aircraft engine manufacturers like CFM International, Pratt &
Whitney, Rolls Royce, etc. has increased their demand by airline companies for
their aircraft. For instance, in May 2021 Indigo Airline ordered 600 new Leap-1A
turbofan engines for the company’s A320neos and A321XLRs from CFM
International. In March 2021 Southwest Airlines signed a contract with CFM
International for Leap-1B turbofan engines to power 100 Boeing 737MAX aircraft.
Hence the increase in demand for such advanced turbofan engines has positively
impacted the demand for aviation lubricants such as calcium sulfonate which
would be used as grease, hydraulic fluids in such engines.
Aviation Lubricant Market Challenges
The fluctuating price of crude oil
Lubricant oil
is extracted from crude oil after going through a series of processes like
sedimentation, fractioning, hence the lube oil collected after these processes
is mixed with additives to create base oil which is used in the manufacturing
of aviation lubricants like engine oil, piston oil, etc. Hence the price of
crude oil keeps fluctuating due to geopolitical, whether or supply chain mishap
reasons which disrupt the flow of crude oil to markets. Such disruption leads
to irregular production of lubricants thereby causing a misbalance between
demand and supply of lubricants. For instance, as per the December 2021 report
of the U.S Energy Information Administration, the crude oil price dropped to
39.17 US$ per barrel in 2020 from 56.99 US$ per barrel in 2019. Hence due to the
price reduction, crude oil production fell by 8% in 2020 i.e., 11.3 million
barrels per day compared to 12.2 million barrels in 2019. Such a decrease in
crude oil production reduced the lubricant output for aircraft thereby
negatively impacting the aviation lubricant market.
Aviation Lubricant Industry Outlook
The companies to develop a strong regional presence and strengthen their market position, continuously engage in mergers and acquisitions. Aviation Lubricant top 10 companies include:
1. Total Group
2. Exxon Mobil Corporation
3. Royal Dutch Shell Plc.
4. Eastman Chemical Company
5. The Chemours Company
6. The Phillips 66 Company
7. NYCO
8. Lukoil
9. Aerospace Lubricant Inc
10. Nye Lubricants
Recent Developments
- In March 2020, Shell Indonesia announced investments to expand its production capacity at the lubricant-oil-blending plant in Indonesia. Hence after completion, the company will be able to produce 300 million liters of finished lubricant, thereby meeting the growing demand for domestic lubricants in Indonesia
- In 2021, private equity firm American Industrial Partners acquired RelaDyne which is one of the leading firms in the North American lubricant market. Hence such acquisition will enable American Industrial Partners to expand its lubrication business in North America.
Relevant Reports
Lubricants Market - Forecast (2022 - 2027)
Report
Code – CMR 0129
Industrial Lubricants Market - Forecast (2022 - 2027)
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Code – CMR 0417
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