Lube Makers Pin Hopes on Middle East Aviation
The Middle East has firmly established itself as a hub for some of the worlds most luxurious airlines. Their top-flight aircraft need top-flight lubricants. Mark Townsend takes off on a journey through the regions aviation lube market.
An eight-hour flight from the Middle Easts premier airports reaches 80 percent of the worlds population, and the same swath of the world is forecast to drive 70 percent of global economic growth over the next two decades, a major plane maker claims. This has made renowned Gulf carriers – Emirates, Qatar Airways and Etihad – a major force in global aviation, grabbing the attention of lubricant producers.
While the regions automotive market is languishing, its aviation sector is proving resilient, despite geopolitical tensions and an economic downturn. This signals growth for aeronautical lubricant and grease demand, supported not only by new aircraft deliveries, but also by a thriving maintenance, repair and overhaul market, mirroring a global trend.
ExxonMobil says the market for aviation lubricants will increase 55 percent by 2040, not confined to civil aviation. Setting aside military aircraft, sales in the Middle East have soared in recent years, particularly to Saudi Arabia, the United Arab Emirates and Oman, part of a global aviation market worth U.S. $15 trillion by 2028, according to Boeing.
In its latest commercial market outlook, the Chicago-headquartered aerospace giant estimated the Middle East will account for 3,130 new commercial aircraft deliveries valued at $725 billion by 2038. The regional services market, which includes maintenance, repair and overhaul, is set to reach $790 billion in the same period, making it a major consumer of aviation lubes and greases. The Middle Easts emergence as an aviation center has been fueled by the growth of the aforementioned mega-carriers, but equally the rapid growth of low-cost Emirati lines Air Arabia and Flydubai.
Major aviation lubricant and grease companies have beaten a path to the region. Shell, Philipps 66, Total Lubrifiants, BP, Chevron, ExxonMobil and Eastman have all established a presence there. Local refiners, including Dubai-based Emirates National Oil Co. and Abu Dhabi National Oil Co., have also ridden on the back of the burgeoning aviation sector by supplying aviation lubricants and jet fuel.
Faith in the regional boom could be tested, however, amid airline overcapacity after a period of rapid growth and a tense regional political backdrop. In the year ending March 31, Qatar Airways reportedly suffered a $639 million loss.
Innovate or Die
Demand for ultra-long-haul travel is on the rise. The fuel efficiency of the latest aircraft, including Boeings 787 Dreamliner and Airbus A350, tap pent-up demand for point-to-point travel over extended distances. Singapore Airlines currently holds the record at 18 hours 45 minutes for the worlds longest nonstop passenger flight, using an Airbus A350-900 ULR, a record previously held by Qatar Airways.
Beyond the hype, these extreme distances necessitate a new generation of oils to cope with higher temperatures in the turbine that an epic 9,521 mile flight from Singapore to Newark on the U.S. East Coast creates. Left unchecked, higher temperatures can cause coking – a buildup of carbon deposits – that may need expensive engine overhauls.
The need for thermal stability and oxidative resistance has led to the emergence of new lubricants, such as Shells AeroShell Turbine Oil 560, a 5 centistoke synthetic ester lubricating oil, and ExxonMobils Mobil Jet Oil 387, which Japan Airlines recently selected for its new A350 fleet. Development of oils for high-temperature applications also has implications for Middle East carriers wide- and narrow-body fleets, where ambient ground temperatures can top 50 degrees Celsius in the summer. That is in addition to a huge amount of pressure placed on grease performance. During takeoff, an aircrafts wheels accelerate from zero to 170 miles per hour in under 50 seconds, heating the wheel bearing quickly.
Analysts say the aviation market is moving toward fewer greases for lubrication and maintenance, with an increased use of multipurpose greases based on lithium complex thickeners. That is good news for fleet operators and maintenance, repair and overhaul companies and helps reduce inventory and costs without giving up important performance characteristics. Shell Aviation Lubricants claims the use of lithium thickeners reduces the risk of intermixing – an issue that can affect a greases performance due to incompatibility or contamination when mixing two or more greases.
Industry sources say many airline maintenance teams choose a grease based purely on price, but that increasingly looks like a false economy. Such decisions probably do not take account other important factors, including how often the grease needs to be reapplied, how resistant is it to corrosion after de-icing and how quickly the grease softens or hardens, or breaks down in service. The lubricant industry says it is plowing substantial amounts of money into research and development, at a time when airlines are seeking to innovate and drive down costs, but there are criticisms the industry has been slow to innovate.
The preoccupation with opulent premium cabins has given way to extracting more from less. Consider the demise of the colossal four-engine, double-decker Airbus A380 in favor of more fuel-efficient twin jets. Boeings titanic competitor, the third generation 747-8, is now mostly sold as a freighter, when the earlier passenger variant was once dubbed Queen of the Skies.
737 Maxed Out, For Now
Meanwhile, the continued grounding of Boeings controversial 737 Max presents challenges for operators of the aircraft, and the Middle East is no exception. Healthy planes are ones that fly, and extended downtime in a harsh environment such as the Middle East has financial and mechanical costs. According to Vanessa Boag, general manager of Shell Aviation Lubricants, a Boeing 737 has an incredible 359 grease application points, each of which requires a specific grease to optimize performance and extend the life of vital aircraft components.
Fundamentally, youre looking to understand whats the mechanical stability, base oil viscosity, corrosion washout. Does the grease stay where you want it to stay, and [does] it pro-vide the best protection? Boag said.
Environmental factors including humidity, atmospheric pressure and the amount of salt and dust an aircraft is exposed to are of central importance to reducing wear and corrosion, she added. The longer these 737s remain grounded, the more onerous the task will be to return them to normal service.
Replicating trends in the automotive sector, synthetic engine oils are attracting more interest from airlines. Flydubai recently chose French company Nycos Turbonycoil 600, a synthetic turbine oil, for use in its fleet of 61 Boeing 737 aircraft, which includes the grounded 737 Max variant. Turbonycoil 600 meets several standards, including the SAE AS 5780 SPC specification and ExxonMobils MIL-PRF-23699 standard performance classification. Nyco has opened a local office located in the Jebel Ali in the U.A.E free zone to service Flydubai.
Not Beyond Regulatory Reach
The global push for reduced greenhouse gas emissions is already pressing on the aviation sector and could cloud the horizon for the aviation lubes market. The phenomenon of flight shaming to raise awareness about travels impact on the climate is already altering flying habits in the U.S. and Europe. In the absence of progress on sustainable aviation biofuels, it has become a big enough issue for the industry to feel a modest loss of revenue, reported Forbes. The main issue is cost. Neste, the Finnish refiner and marketer of base oils, is the worlds largest producer of sustainable aviation fuel, but at around $1,000 to 1,200 per metric ton, biofuel is twice the price of fossil-based jet fuel, UBS estimates.
Also, in a bid to reduce costs, digitization of processes, among other things, allows airlines to streamline inventory levels. That is likely to mean reduced lube or grease stocks and may favor suppliers that offer multipurpose products. (At the time of writing, ExxonMobil did not reply to questions about the regional outlook for the sector.)
Aviation is responsible for around 12 percent of carbon dioxide emissions from all transport sources, the Air Transport Action Group estimate. But CO2 emissions per unit of travel – as measured by revenue passenger kilometers – are now 51 percent less than they were 20 years ago, Boeing claims, and last years total air traffic was more than triple 1998 levels. That a positive for operators, but changes in market dynamics could be a spoiler for lubricant demand, even if not driven by regulatory pressures.
An October report by Swiss bank UBS said high-profile campaigns, including that by Swedish environmental activists Greta Thunberg and Climate Rebellion, have pushed climate awareness to the top of the global agenda. About a fifth of the 6,000 people surveyed by UBS said they had reduced the number of flights they had taken in the past year. Technological advances, including additive manufacturing or 3D printing of parts, may also shake up the regional lube market but could offer companies and original equipment manufacturers the opportunity to bundle parts with the appropriate lubricant or grease. According to UBS, the current supply chain is very fragmented and would benefit from a coordinated and more structured approach.
One solution to emissions may be electrification of aircraft. But as batteries are heavier than jet fuel, the idea of electric planes is still a distant prospect. Even so, the advancing wave of auto electrification will have a knock-on effect, with potentially market-changing conse-quences for lube and grease use.
Tim Clark, president of Emirates Airline, recently said he wished to see all airport ground vehicles electric powered to improve the sectors performance on sustainability. This will not halt the inevitable pressure on the sector to address the root emissions culprit – the aircraft – in much the same way the automotive and marine sectors have been affected.
Middle East in the Cockpit?
Todays airline executive boards are pressing aircraft manufacturers for greater fuel efficiencies that are pushing the passenger aerospace industry to it limits. Depending on routes flown and the airlines cost efficiency, fuel costs amount to approximately 20 to 35 percent of total costs, said UBS. Major lube companies have their work cut out given the rapid evolution of other aircraft technologies.
For now, the Middle East, with its unique operating environment and sheer size, is well placed to determine fuel efficiency and sustainability developments.