Without trying to labour what is now over-used terminology, last year was one of unprecedented change in many ways.
In our own world of Aviation Fuel, the industry has been used to constant and buoyant growth at around the 3% level year-on-year since the dawn of mass air travel in the early 1970’s.
However, in 2020 the industry felt demand shrink to tiny fractions of what it once was as airlines saw their own demands disappear and aircraft had to be parked (or returned to lessors if at all possible).
Airports and airport aviation fuel facility operators have been faced with the completely new challenge of mothballing infrastructure for the long term, instead of expanding to support airport growth. The aviation fuel industry has had to develop procedures for something which has not happened before – taking all or parts of fuel systems out of operation and attempting to keep them fit to operate at some unknown future date, without loss of integrity or effect on fuel quality.
This is uncharted territory for all concerned and presents numerous difficulties – not least of which is how to deal with the prospect that some parts of a system may be out of operation for several years (if not permanently). Fuel systems are designed and optimised for certain flow velocities, and if those velocities are not achievable because demand has collapsed (and may not return if, for example, a whole airport terminal is decommissioned), significant operational problems may ensue.
Nevertheless, as with all infrastructure and like the airports which are reliant upon them, aviation fuel handling facilities are complex long-term investments. They depend upon a long-term view being taken – so that there is always a plan to match capacity with demand, and that the response to an underlying growth in demand is positive.
Early in the pandemic IATA was predicting that it would be 2023 before activity returned to 2019 levels. This then changed to 2024 in the middle of last year. It is entirely possible that activity may not recover until 2025, or later. At least one airport is now predicting that demand figures originally forecast for 2025 will not occur until 2030.
However there is optimism that demand will recover, and there is certainly considerable pent-up demand from populations who have seen their freedom to travel severely curtailed.
With this in mind, it seems that some airports and facility operators have been keen to take advantage of the downturn in order to invest in and develop airport fuel handling infrastructure.
This translated into a good year for eJet.
Certainly 2020 was much better than might have been expected once the impact of Covid became clear. We continued to work in Europe and Asia throughout the year. We completed assignments in Singapore and Iceland and we won significant new work in India and Nigeria.
Nevertheless we are very much aware of the difficulties and hardships being felt throughout the aviation sector, and remain mindful of the importance that the industry has to economic activity and employment. We hope for a return to some form of normality as soon as possible, and that short term hardships and long-term impacts are minimised.
Whilst this article is a look back on the year just gone, it is appropriate to look forward also.
When it returns to normal, or achieves the “new normal”, what will the Aviation Fuel industry look like ? We see two changes on the horizon.
Firstly, the industry will be handling smaller volumes of jet fuel for some time to come. It will take a long time for flight frequencies, aircraft movements, passenger numbers, cargo tonnages to return to pre-Covid levels. Many airlines have deleted larger, fuel-thirsty, aircraft from their fleets (the A380 and B747 from passenger service in particular). When they do return to service, fuel demand from the remaining fleets will be less than before.
Secondly, the new world of aviation will be greener. 2020 showed much increased interest in SAF (Sustainable Aviation Fuel), and no online conference was complete without some coverage of it.
This means that SAF will form a significantly larger proportion of the whole jet fuel pool than it did in 2019, before the pandemic.
Couple this with an impending retrenchment away from hydrocarbon ground fuels (gasoline and diesel for private vehicles – e.g. the sale of new petrol and diesel cars will be banned in the UK from 2030), and the outlook for oil products will be significantly changed. The barrel of crude will have to yield far more jet fuel and far less gasoline in particular, and fewer barrels will need refining.
This will all have an impact upon domestic refining capacity in various countries, and their balances of imports and exports (and in the case of the UK, the additional disruptive effect of Brexit has not been fully played out yet).
What this means is that, more than ever, we live in challenging times, serving a dynamic industry going through perhaps its largest challenge to date.
Whatever the outcome is, and whatever the path to this outcome looks like, eJet will try its hardest to play its part and respond to client requirements.
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