Source: Discovery Report
I remember watching the movie "The Fifth Element" when I was very young, when the red-haired Lilou landed in Cobain's car from the sky, in addition to being surprised by Lilou's beauty, I was thinking "Wow! Cars are flying in the sky!
Then when I grew up, whenever I was stuck in traffic and couldn't move, I would want to be able to fly over directly.
Until now, I have been taking "air taxis" and sightseeing tours...... It's possible that this daydream is about to come true!
This year, the low-altitude economy of the two sessions was written into the government work report for the first time, and was included in one of the key tasks of the country to cultivate emerging industries and future industries in 2024.
On April 24, the low-altitude economic concept strengthened again across the board, and the plate rose sharply throughout the day, and many related concept stocks rose to the limit.
So, what exactly is the low-altitude economy, why is there so much attention all of a sudden, what impact will it have on our lives, and how far is it from large-scale commercial use?
What is a low-altitude economy?
The concept of "low-altitude economy" originated from the academic seminar of the general aviation industry in 2009 and was added to the national plan for the first time in 2021. It is a comprehensive economic form that relies on low-altitude airspace, takes various low-altitude flight activities of various manned and unmanned aircraft as the traction, and radiates and drives the integrated development of related fields.
In other words, "low-altitude flight + economic activity".
So how high is the "low altitude"?
To be precise, airspace within 1,000 meters of the vertical distance from the ground plane directly below is "low-altitude", and sometimes this limit can be relaxed to 3,000 meters depending on the flight altitude.
All the "economic activities" that arise at this height of space belong to the low-altitude economy.
It is equivalent to building the current flat "road" to a "low altitude", and the road will change from "flat" to "three-dimensional", and there will also be cars on the road, people driving and industries born from the road.
In terms of industrial composition, the low-altitude economy can be said to be a cross-border player, spanning the primary, secondary and tertiary industries, and the key development areas can be divided into four parts: manufacturing, flight, support and comprehensive services, including but not limited to general aviation, UAV applications, air tours, logistics and transportation, remote sensing mapping, emergency rescue, agricultural plant protection and many other fields.
Among them, general aviation is the main industry of the low-altitude economy, the UAV industry will be the leading industry of the low-altitude economy in the future, the combination of UAM (urban air mobility) is the development hotspot, and eVTOL (electric vertical take-off and landing aircraft) is the mainstream form of UAM.
It is precisely because of the characteristics of "multi-field, cross-industry, and full-chain" that BOCOM International pointed out that the low-altitude economy is an important starting point for the mainland to drive the automation transformation of agriculture, industry and construction and service industries, as well as reduce costs and increase efficiency in the process of economic transformation, and is the pioneer of new quality productivity.
Why is there so much attention all of a sudden?
However, speaking of which, the low-altitude economy has been developed in the mainland for many years, and it cannot be regarded as an emerging product, not to mention anything else, drone aerial photography and performances must have been seen by everyone, so why did it suddenly burst into everyone's field of vision this year?
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This is mainly due to the support of the policy side, the increasing maturity of low-altitude aircraft technology, and the continuous expansion of market demand.
In terms of policy, in recent years, the state has successively issued relevant management regulations and guidance from top to bottom, clarifying the regional division of low-altitude airspace, the structure and composition of the flight service system, etc., providing strong support for the healthy development of low-altitude economy.
In January 2024, the official implementation of the "Interim Regulations on the Management of Unmanned Aircraft Flights" marks that there is a law to follow in the field of unmanned aerial vehicles, and in March 2024, the government work report proposed to build low-altitude economy and other fields into new growth engines, and also in March, the Ministry of Industry and Information Technology and other four departments issued the "Implementation Plan for the Innovative Application of General Aviation Equipment (2024-2030)", which put forward specific goals for the development of general aviation in the continent in 2027 and 2030.
Local policies have also been intensively introduced, and many provinces such as Jiangsu, Shandong, Sichuan, Hunan, and Yunnan have clearly proposed the development of low-altitude economy in this year's local government work report.
Suzhou, Hefei, Wuhu, Guangzhou, Shenzhen and other places have also begun to formulate and implement low-altitude economic development plans, and build testing and airworthiness certification bases.
In terms of technology, the mature technologies and solutions accumulated in the fields of drones, 5G, vehicle electrification and intelligence can provide strong technical support for the low-altitude economy.
On the one hand, UAVs are an important carrier of the low-altitude economy, and the mainland is a global leader in the development of UAVs, with the scale of the mainland's civil UAV industry exceeding 120 billion yuan in 2023, ranking first in the world, and it is expected that by 2025, this figure will exceed 200 billion yuan.
On the other hand, the mainland's 5G infrastructure is internationally leading, with more than 3.37 million 5G base stations, and the characteristics of large bandwidth, low latency and high reliability can provide communication support for low-altitude flights.
In addition, the three-electric system used in eVTOL, an important product in the future of the low-altitude economy, is similar to that of new energy vehicles, but the technical level is higher. Since the opening of the era of electrification in 2020 and 2023, the penetration rate of new energy in the automotive industry in mainland China has increased rapidly, intelligent driving has been rapidly implemented and carried out, coupled with the world's leading lithium battery industry chain, the degree of technical adaptability is not too high.
The continuous growth of market demand is also an important factor to promote the booming development of the low-altitude economy. Traditional ground transportation is limited by the flat traffic network and has limited capacity, while low-altitude transportation is point-to-point, and there is more room for efficiency optimization.
With the increasing demand for efficient, convenient and safe travel methods, the low-altitude economy, as a new mode of transportation, is gradually being favored by more people.
With the support of policy, technology and market demand, the low-altitude economy is expected to usher in broader development prospects. According to CCID Consulting statistics, the scale of the mainland's low-altitude economy will reach 505.95 billion yuan in 2023, a year-on-year increase of 33.8%, and it is predicted that the mainland's low-altitude economy will exceed 1 trillion yuan by 2026.
What impact does it have on our lives?
From the perspective of the industrial chain, the upstream of the low-altitude economy is the field of raw materials and core components, the midstream includes low-altitude manufacturing, low-altitude flight, low-altitude support and comprehensive services, etc., and the downstream is various application scenarios.
Guohai Securities believes that the low-altitude economy is still in a very early stage of development, and the equipment manufacturing links in the upstream and midstream of the industrial chain will be the first to benefit, which is the core area that needs to be focused on at present.
So for ordinary people, what impact will the low-altitude economy have on our lives?
This is to look specifically at the application scenarios of low-altitude economy.
According to different application scenarios and service objects, the low-altitude economy can be subdivided into three categories: production operations, public services, and aviation consumption.
In addition to the traditional general aviation business, the key landing scenarios of the domestic low-altitude economy in the future will also include emergency rescue, logistics and distribution, manned urban air mobility, and new general aviation consumption.
In the short to medium term, tourism and medical care may become the core markets of the mainland's low-altitude economy.
Tourism, as a priority commercial operation direction for unmanned aerial vehicles, will start with experience flight and tourism, and gradually carry out commercial operation.
The field of aeromedical ambulance is one of the most backward fields in the application of general aviation in mainland China compared with developed countries, and the future aviation rescue equipment is the key area of emergency rescue force construction, and helicopter is the key layout direction.
In the long run, the low-altitude economy extends from the ground to the low-altitude airspace, from the plane road network to the three-dimensional space, which not only reduces the pressure on ground traffic, but also creates a new industrial space, and the UAM (urban air mobility) market space is broad.
According to Morgan Stanley's prediction, from 2025 to 2035, the UAM cargo scenario will be the first to usher in rapid growth, and the manned scenario will gradually enter an explosive period in 2035. Under the neutral forecast scenario, the global UAM scale will be $55 billion in 2030, $1 trillion in 2040, and $9 trillion in 2050, of which the U.S. and Chinese markets will be $2.5 trillion and $2 trillion respectively.
In addition, logistics and distribution is currently the most widely used scenario in the low-altitude economy. In 2015, YTO completed the debut of domestic drone delivery, and then SF Express, Post, JD.com, Suning, Cainiao, Ele.me and other express delivery, e-commerce, and takeaway platforms have deployed drone + logistics distribution.
Compared with the traditional logistics and distribution methods, unmanned has the advantages of convenience and efficiency, saving labor costs, reducing potential safety hazards, etc., and the distribution efficiency is greatly improved, and the "branch + last line" drone logistics is expected to become an effective supplement to future logistics needs.
In addition to feeder and last-line logistics, drone delivery services are also in full swing. As of November 2023, Meituan UAV has opened 22 routes in many places in China, providing drone delivery services in community office buildings, scenic spots, hospitals and other scenarios, and has completed more than 210,000 orders.
Imagine the future, you can overlook the scenery from the air at any time, commuting may become a "flying", and the takeaway brother may become a "takeaway pilot", manipulating drones to deliver goods, and remote mountainous areas can also deliver to your door......
With the further improvement of technology and scenarios, there will be air service platforms such as the current taxi software, payment software, application software, etc., which will continue to emerge to further change our lives.
How far away is it from mass commercialization?
How far is the low-altitude economy from large-scale commercial use?
Although the prospects for the development of the low-altitude economy in China look bright, there are still many challenges before large-scale commercial use.
From a global perspective, the low-altitude economy has gone through the stage of exploration and standardization, and has entered the stage of popularization. By reviewing the history of the United States, a maritime powerhouse, we can summarize the necessary elements for the prosperity and development of the low-altitude economy:
1) Open airspace: let the plane fly;
2) Sufficient airports: let the plane fall;
3) Perfect basic support: including ground aviation fuel services, maintenance services, in-flight flight charts, radar information, meteorological information and other services;
4) Enough pilots: an affordable training system for general aviation pilots;
5) Mature manufacturing industry: the country has the ability to mass-produce aircraft and core components.
Looking at the domestic market, although the current round of policies is unprecedented, the airspace is open and the rules are clearer, there are still many problems to be solved in the development of the mainland's low-altitude economy.
First of all, we can't compare with traditional aircraft manufacturing. No way, we started late, others started early, the entire aircraft industry chain, will lag behind others a lot, although has been chasing, but temporarily some core components of the gap is still large.
As of 2023, there are more than 5,100 public general aviation airports in the United States, and the number of private airports of various types has reached 15,000, ranking first in the world. In addition, the U.S. is home to more than 3,300 ground-based flight fixed facility operators, more than 4,100 repair stations, and more than 2,200 rental companies.
According to the data of the General Aviation Branch of the China Air Transport Association, as of 2022, the number of general aviation operators in the mainland is about 655 and 399 general aviation airports, which will only increase to 690 and 449 in 2023.
This means that you will face the problem of "not being able to fly and not falling".
In addition, the pilot structure of the mainland is uneven, and the number of pilots in general aviation is very small compared with that of civil aviation. Since the 1970s, the number of FAA-certified pilots has remained at around 600,000.
Compared with the United States, by the end of 2022, the total number of valid civil aviation pilot licenses in mainland China was 81,430, including 28,214 route transport pilot licenses and 45,895 commercial pilot licenses, which is about 1/8 of the total number in the United States.
Rome was not built in a day, the construction of low-altitude economy is a systematic project, but also requires the concerted efforts of the government, industry and enterprises in many aspects, in order to truly promote the development of low-altitude economy to provide a guarantee.
It remains to be seen where we can go in the future.