The aviation industry is experiencing a period of contrasts. While air traffic continues its strong recovery following the pandemic, the sector is simultaneously facing growing pressure to advance towards net-zero emissions targets.

According to a report published by Research and Markets in January 2026, the global aviation fuel market is expected to grow from approximately USD 302.43 billion in 2025 to USD 455.3 billion by 2031, with a compound annual growth rate of 7.06%. This increase is driven both by returning demand and by the transition towards new energy solutions.

Air Traffic Recovery Continues To Set The Pace

The rebound in air transport remains the main driver behind this growth. By the end of 2025, passenger traffic had increased by 4.6%, while air cargo rose by 4.1%.

This resurgence keeps conventional jet fuel as the operational backbone of the industry. However, market value also reflects a different reality: the gradual shift towards more expensive and technologically advanced fuels, required to meet environmental commitments.

SAF: A Strategic Priority With Ongoing Challenges

Sustainable Aviation Fuel (SAF) has become one of the sector’s key priorities, although large-scale deployment remains limited.

Global SAF production in 2025 is estimated at 1.9 million tonnes, representing just 0.6% of the industry’s total fuel consumption. Cost is another major barrier: SAF currently remains between two and five times more expensive than traditional fossil fuel, at a time when fuel already accounts for around 31% of airline operating costs.

This gap between climate ambition and economic reality continues to be one of aviation’s greatest challenges.

Technological Innovation And Supply Security

In response to raw material shortages and oil price volatility, the industry is advancing new approaches to secure future supply.

One of the most promising developments is Alcohol-to-Jet (AtJ) technology, which enables sustainable fuel production from ethanol and agricultural waste, overcoming the limitations of used cooking oils. Projects such as the new facility developed by Honeywell and Taiyo Oil in Japan mark the beginning of larger-scale SAF production in Asia.

At the same time, airlines are redefining their role in the value chain. More than 170 long-term offtake agreements have already been signed by 81 airlines, turning carriers from simple buyers into financial partners of producers, helping to secure supply and stabilise future prices.

Looking Ahead To 2031

The outlook for the aviation fuel market points to robust growth, shaped by multiple factors. The sector’s future will depend not only on flight volumes, but also on its ability to scale technologies such as Alcohol-to-Jet and make SAF an economically viable alternative to traditional jet fuel.

A complex yet essential transition that will define the next chapter of aviation.