(John Kemp is a Reuters market analyst. The views expressed are his own)
LONDON, Feb 6 (Reuters) - High oil prices have radically reshaped fuel consumption in the airline industry - a sector where demand was supposed to be insensitive to the cost of crude because there are few obvious alternatives.
Travelling across continents and oceans by road, rail or sea is impractical, and there is no real substitute for using refined petroleum products to power aircraft.
Yet in the United States, a quadrupling of crude and jet fuel prices since 2003, coupled with the prolonged recession, has cut jet fuel consumption by around half a billion barrels per year (roughly 1.4 million barrels per day) compared with the previous trend (http://link.reuters.com/cuh66v).
In 2013, U.S. and international airlines operating in or from the United States consumed more than 500 million barrels of jet fuel, according to official statistics. After motor gasoline and road diesel, jet fuel is the most important product supplied by U.S. oil refineries.
The 516 million barrels of jet supplied to airlines in the 12 months to November 2013 was dwarfed by the 3.2 billion gallons of gasoline and the 1.3 billion gallons of road diesel and home heating oil delivered to U.S. customers.
Even so, jet fuel consumption in the United States was equivalent to Saudi Arabia's entire crude output for more than 50 days.
But fuel consumption has been falling for a decade after peaking before the attacks on the World Trade Center in 2001.
Consumption of civilian fuels such as Jet-A and military-grade fuels like JP-8 is down 18 percent from a peak of 631 million barrels per year at the millennium, according to the U.S. Energy Information Administration.
Between 1980 and 2000, jet consumption grew at a compound annual rate of 3.6 percent. If fuel demand had continued to grow at the same rate, it would now stand at just over 1 billion barrels per year rather than 516 million.
Instead, consumption has been basically flat or falling for the last 13 years, though it showed signs of stabilising in 2013.
Crucially, the downturn appears to be mostly structural rather than cyclical. Consumption remained flat or continued to fall even as the economy recovered from the post-9/11 and 2008 recessions.
Slower growth in passenger numbers, more modern and fuel-efficient aircraft, and operating flights with fewer empty seats have all contributed to a reduction in fuel consumption compared with the previous trend.
In response to soaring fuel bills, airlines have been forced to operate much more efficiently than before, eliminating excess capacity and under-utilised routes.
U.S. and international airlines operating in the United States spent a staggering $51 billion on fuel in 2012, up from just $15 billion in 2000, according to the Bureau of Transportation Statistics.
Fuel is now the largest single item of expenditure for most U.S. and international airlines. The pressure to achieve greater efficiency has been immense.
U.S. and international airlines carried 813 million passengers in 2012, up 21 percent from 2002. But the number of available seat-miles - a measure of capacity - rose just 16.6 percent over the same period.
In 2002, the average plane was 72.6 percent full. By 2012, the load factor had reached 82.5 percent, and is on course to be even higher in 2013 and 2014.
Aircraft are also becoming much more efficient. New aircraft use around a quarter less fuel than the fleet average, an Airbus representative told an expert meeting convened by the OECD's International Transport Forum (ITF) ("What is the future of air transport?" May 2010).
Similar gains have been made in Europe and the other advanced industrial economies. Even more efficiency will be needed in future, however, to cope with the predicted growth in passenger numbers in emerging markets.
Global passenger traffic has already risen from 300 million in 1970 to 2.5 billion in 2010, and is predicted to hit 5 billion or even 10 billion per year by 2050, according to the ITF's expert panel.
The global aviation industry aims to improve fuel efficiency by 1.5 percent per year until 2020, according to the International Air Transport Association (IATA), which lobbies on behalf of carriers.
Beyond 2020, global airlines are committed to "carbon-neutral growth". Rising passenger numbers and freight volumes will have to be offset by continued efficiency improvements and carbon offsets such as increased use of biofuels to meet that goal.
There are estimated to be 24,000 aircraft in the global fleet. Replacing them all with the most modern generation of planes could cut fuel use and carbon emissions by 25 percent.
Fleet turnover takes about 20 years at normal replacement rates. IATA, however, says 12,000 new aircraft costing $1.3 trillion will be purchased by 2020, which would result in another substantial cut in fuel use and emissions compared with the baseline ("Airlines International: Technology and Environment Supplement" April 2012).
As long as oil prices remain high, airlines will have strong incentives to restrict route-network growth and continue ordering more efficient aircraft.
(Editing by Dale Hudson)