Electric Aviation Won't Kill Jet Fuel - But It Could Take the Best Routes First

Aviation is often regarded as one of oil's more stable remaining markets. In 2026, this outlook is still justified. Airlines are projected to burn around 104 billion gallons of fuel this year, with sustainable aviation fuel accounting for less than 1% of total consumption. Virtually every commercial passenger aircraft in service still relies on liquid hydrocarbons.

However, this perspective may be overlooking the competition from emerging technologies. On July 30, Archer's all-electric Midnight aircraft completed a round trip between Salinas and Monterey, a nine-minute journey each way, showcasing a piloted, coordinated flight rather than the launch of an autonomous urban air-taxi network.

Archer is in the midst of certification proceedings, while its partners are involved in the FAA's eVTOL Integration Pilot Program. Certifications matter, but so does the rate of progress. Electric flight is no longer confined to the realm of scientific experiments. The question of interest for oil markets is what happens when batteries begin to dominate in the areas of aviation where they are most suited.

The first fully electric aircraft, the Pipistrel Velis Electro, received EASA certification in 2020. Though it is a two-seat trainer, it demonstrated that an electric aircraft and propulsion system could meet commercial certification standards. The technology is now advancing towards larger applications. By 2025, EASA certified Safran's ENGINeUS 100, an electric motor platform designed for applications up to 19 seats.

Heart Aerospace is developing its 30-seat ES-30, boasting a claimed 200-kilometre range and type certification aiming for 2031. Archer is pushing the eVTOL model into supervised real-world operations. These aircraft will not replace a Boeing 787. They do not need to. The electrification of road transport did not involve replacing every vehicle type at once.

Instead, buses, passenger cars, and increasingly trucks electrified as battery economics and charging capabilities improved for each use case. Aviation is likely to follow a similar uneven trajectory. Training, short cargo missions, island routes, air taxis, and regional passenger services represent promising early markets, as their energy requirements are limited and these aircraft can frequently return to known infrastructure.

The efficiency of electric propulsion offers additional advantages. NASA is developing electric machines with efficiency exceeding 98%, while electric propulsion eliminates complex combustion components, reduces noise, and enables the use of locally generated electricity instead of a globally traded refined oil product. The latter point gains greater relevance in 2026, as Middle East disruptions have driven IATA's projected average jet-fuel price to $152 per barrel, approximately 70% higher than in 2025, increasing the industry's fuel bill by roughly $100 billion.

Electricity is not entirely immune to energy shocks, but an aircraft charged from a diversified domestic power system is not directly exposed to crude prices, refinery margins, tanker routes, or potential disruptions in the Middle East. This situation draws a parallel with the electric car market. Hydrogen and synthetic fuels can technically power road vehicles, as can biofuels replace gasoline and diesel.

However, battery-electric cars have gained an efficiency advantage due to the energy conversion process losing energy and adding infrastructure. The same may occur in aviation, but only within the range where batteries are effective. Jet fuel retains a significant advantage due to its energy density per kilogram, which surpasses today's batteries.

Although an aircraft becomes less efficient with each additional mass carried into the sky, jet fuel's dense liquid energy makes it indispensable for long-haul aviation. Sustainable aviation fuel (SAF) still holds an advantage over batteries for long-haul flights due to its compatibility with existing aircraft and infrastructure.

Despite SAF's current limited global supply of only 2.4 million tonnes, representing 0.8% of aviation fuel use, and its relatively high cost, the industry expects global SAF supply to reach 2.4 million tonnes in 2026, which is still only 0.8% of aviation fuel consumption. Moreover, SAF remains expensive. Consequently, the likely outcome will not be a direct competition between batteries and SAF across the entire aviation sector.

Instead, batteries will target routes where electricity is technically sufficient, while SAF and eventually e-fuels will vie for the larger aircraft and longer routes where batteries remain impractical. On these short routes, liquid fuels may eventually face the same challenge as hydrogen in the passenger car market - technically feasible but economically difficult to justify.

Oil displacement will not be rapid. The global aircraft fleet is aging, with most new orders and an average fleet age of 15.2 years. Most of these newly ordered aircraft still burn jet fuel. Scaling electric adoption is further hampered by certification, charging infrastructure, battery supply, and airport operational procedures.

Archer's successful flight exemplifies the situation. The aircraft can fly, but scaling dozens or hundreds of them through constrained urban airspace, quickly charging them, turning passengers around, and operating efficiently presents significant challenges.