Cost-utility discrepancy is a major obstacle to the development of the low-altitude economy and a problem that urgently needs to be solved. In layman's terms, the core of cost-utility discrepancy is that the selling price is too high, and buyers feel it is not worthwhile or do not perceive any utility, thus failing to form an effective market equilibrium price, making it impossible to generate transactions, and ultimately resulting in a limited economic scale and restricted growth rate.
On October 30, 2025, in Harbin, the Platinum Shadow T1400 unmanned helicopter smoothly took off and completed a series of maneuvers, including hovering, directional flight, and precise landing. (Visual China photo)
Currently, the main reasons for the cost-utility discrepancy in the low-altitude economy are as follows:
First, the technological roadmap is unclear, and the overall cost is highly uncertain, posing a high risk of price discrimination to buyers. This problem exists in most sectors of the low-altitude economy, including passenger and cargo transport and industry applications. The choice of aircraft, infrastructure, operation and management models, and risk management methods varies considerably depending on specific needs. This leads to significant information asymmetry between buyers and sellers.
In real markets, technological uncertainty often means sellers can employ aggressive price discrimination strategies. This involves leveraging buyers' preferences and purchasing power to maximize producer surplus and thus diminish buyer utility. For example, if a local government wants to implement a low-altitude urban management system, suppliers will typically tailor project proposals to the highest possible price, based on the city's financial resources, to maximize profits. Faced with this information asymmetry, coupled with technological uncertainty, the government's decision-making cycle lengthens, and competition among suppliers intensifies, ultimately slowing project implementation.
Secondly, the product application chain is long, and the consumption utility is too fragmented, making it difficult to form genuine buyer preferences. In terms of products, the low-altitude economy's business models are generally not independent systems; most must be integrated into existing activities to realize their utility. For example, in the field of inspection and maintenance, drones carrying inspection tools for aerial operations are only one small part, not including other tasks such as tool calibration, data analysis, result processing, and report writing. In the passenger and freight transport sector, low-altitude flight transport often only undertakes transport tasks in a specific space and time period, and may only be a small part of the overall transport mission.
Similar problems are common in the application of low-altitude economic products. The utility generated by integrated services is often evaluated within a holistic framework, and the actual utility is frequently underestimated, suppressed, or ignored. Buyers find it difficult to form genuine preferences, meaning they cannot clearly perceive the true and potential value of the product or service. In other words, this inherent flaw in utility evaluation subtly influences consumers' price perception of low-altitude products, exacerbating cost-utility discrepancies. Similar situations exist in other areas as well; for example, urban taxis, bottled water (beverages), mobile phones, internet cafes, and home cleaning services were largely similar in their early stages.
Thirdly, there is a structural dilemma in the service sector. Products cannot be flexibly segmented, and suppliers' implementation of the highest unit price strategy hinders market development. The low-altitude economy has not yet formed a stable production and supply chain system. Low-altitude service providers have poor product diversification, product sales cannot be flexibly allocated, and many fixed investments cannot be effectively amortized. This leads to the dual obstruction of the development of both low-altitude service providers and the low-altitude product market. For example, if a low-altitude service provider wants to invest in a low-altitude industry application project, due to the lack of general-purpose equipment and public infrastructure, it not only needs to purchase a complete set of equipment from aircraft to infrastructure, but also needs to equip itself with professional personnel and management systems, which significantly increases costs.
If the unit price of a product is broken down into very small increments, a massive number of sales are required to break even on fixed assets. In an underdeveloped market, such sales targets will be rendered unrealistic due to a lack of predictability. In this situation, the only viable investment option is to increase the unit price and reduce the number of units sold, creating a dilemma. For example, for a low-altitude transportation service, if the unit price is 300 yuan per trip, the break-even sales volume is 10,000 trips. If the unit price is increased to 600 yuan per trip, the break-even sales volume is 5,000 trips. If the unit price is further increased to 900 yuan per trip, the break-even sales volume drops to 2,500 trips. In the early stages of a less developed market, investors often adopt a maximum unit price strategy to minimize the number of sales. However, this maximum unit price strategy also significantly compresses demand, which in turn hinders market development.
It's clear that the solution to the cost-benefit discrepancy in low-altitude air travel lies in cost reduction and efficiency improvement. However, the specific path forward is a question that needs to be considered. We can analyze this from the following perspectives:
First, in the passenger and freight transportation sector, the key focus is on how to improve the value density of the entire low-altitude economy chain. The logic is not complicated. Suppose that the transportation in the low-altitude economy has time value in a certain period and interval, but this time value is not prominent enough, thus limiting its effectiveness. Then our task is to improve the value of non-low-altitude links through technological reconstruction, taking low-altitude transportation as the entry point, so as to make the entire transportation task more efficient.
This approach could be highly valuable to leading logistics companies like SF Express, STO Express, YTO Express, ZTO Express, and JD.com, as they naturally possess the ability to optimize the entire transportation process. For example, integrating low-altitude freight into long-distance logistics systems, considering full-chain automation, could create a more efficient unmanned transportation system. Parcels originate from an automated, unmanned warehouse, are transported by ground-based unmanned vehicles to a low-altitude transfer point, where low-altitude drones deliver the goods to the next low-altitude point. From there, they are transferred by drones or unmanned vehicles to the destination unmanned warehouse, then by unmanned vehicles to the receiving point, where robots complete the final home delivery. This achieves full-chain automation, significantly improving time efficiency and saving costs. In this way, the value of the low-altitude economy will be effectively realized, the cost-benefit gap will narrow, and the market can potentially expand further.
Secondly, in industry applications, promoting a standardized low-altitude aircraft system is a major trend. The costs of low-altitude economic applications mainly concentrate in three areas: first, the design and manufacturing of specialized low-altitude aircraft; second, the design and manufacturing of industry-specific equipment; and third, the design and implementation of work mission plans. Because the costs in these three areas are difficult to assess, a black box system is formed, leading to a price-discriminatory sales market. Users cannot effectively assess the investment costs of low-altitude services, making it difficult to achieve a balanced price.
In this context, the primary task for rapidly reducing costs and increasing efficiency is to standardize the industry's aircraft standards system, starting by resolving the issue of price transparency for low-altitude aircraft. If there is little price discrepancy for low-altitude aircraft, it will alleviate information asymmetry for industry users to some extent. Compared to low-altitude aircraft, industry users have a much deeper understanding of specialized industry equipment and operational technology solutions, making cost assessment much easier.
Third, in the flight services sector, the construction of low-altitude economic infrastructure is the core of cost reduction and efficiency improvement. If the government cannot quickly clarify the technical roadmap for low-altitude economic infrastructure and accelerate its planning and construction, it will be difficult for the low-altitude economy as a whole to achieve significant cost reduction and efficiency improvement, and it will also be difficult to cultivate a large-scale low-altitude economic supplier system. On the one hand, low-altitude economic infrastructure is a natural monopoly facility, which is difficult to provide through market mechanisms and will not spontaneously form; on the other hand, the technical and investment thresholds for low-altitude economic infrastructure are very high, and if it cannot be built in advance, it will be difficult to enter the supplier's cost accounting system.
For example, in the absence of low-altitude economic infrastructure, a low-altitude project has only two options for cost accounting: either build its own infrastructure or reduce reliance on infrastructure through technological optimization. Regardless of the approach, this significantly limits the choices available to low-altitude economic suppliers and fails to create effective market incentives. If the construction of low-altitude economic infrastructure is clearly defined, a large number of low-altitude economic suppliers can adopt a highly consistent cost accounting system, reducing uncertainty and achieving comprehensive cost reduction.
Fourth, in the manufacturing of low-altitude aircraft, industrial clusters are an effective way to reduce costs. Currently, the overall scale of low-altitude aircraft production is not large enough, and the supply chain for raw material production, product design, R&D, and manufacturing is still in its early stages, with insufficient agglomeration and significant room for cost reduction. In the consumer drone sector, the effects of industrial clusters are already beginning to emerge. For example, the production of small and medium-sized drones in the Guangdong-Hong Kong-Macao Greater Bay Area has gradually formed a stable supply chain structure in surrounding cities, and through the transfer of key links to northern Guangdong, significant cost reductions have been achieved.
This means that in the entire low-altitude aircraft sector, if future product scale is large enough, collaboration across the entire supply chain will further reduce production costs. As the cost of low-altitude aircraft decreases, the prices of many low-altitude services will become less expensive, stimulating new demand and further expanding the production scale of low-altitude aircraft. Of course, whether such a virtuous cycle can be formed is influenced by many factors, but this trend will not change.
Fifth, while reducing costs, an important way to increase efficiency is to integrate low-altitude aircraft into product innovation. In the past two years, although innovation in low-altitude economic products and services has been strengthened, the overall scale is still small and the development is relatively slow.
There are two reasons for this: First, many industries lack sufficient experience and social awareness in using low-altitude aircraft, and professional talent has not yet fully participated in product creation. Relying solely on low-altitude aircraft suppliers for product innovation is far from enough, as they lack a deep understanding of the industry itself. Second, the design and manufacturing of low-altitude aircraft has not yet been integrated into various industries, lacking consideration of common problems and limiting the scope for imagination. Both of these points will be effectively improved with the further development of the low-altitude economy. Once product innovation gains momentum, the utility of low-altitude services will increase, consumers will have a greater willingness to pay, demand will further expand, and the total market size will gradually increase.
Sixth, talent cultivation is the foundation for the long-term sustainable cost reduction and efficiency improvement of the low-altitude economy. Currently, we have not yet formed an effective talent cultivation system for the low-altitude economy. Although since 2024, major universities have successively begun to set up undergraduate programs in low-altitude technology and engineering and low-altitude economy research platforms, which can be considered a beginning of the construction of a talent cultivation system for the low-altitude economy.
However, this is still a long way from being able to supply the market with low-altitude economy talent in large numbers. On the one hand, the talent training system for the low-altitude economy is not yet perfect, lacking an overall plan from vocational education to general education and then to research-oriented education; on the other hand, the low-altitude economy education system, educational content, and educational goals are not clear enough and need further exploration. Both of these points require time. Under these circumstances, in the short term, the supply of talent for the low-altitude economy may still need to rely on social forces to quickly bring cross-industry talent into the low-altitude economy field through skills training, thus enriching the low-altitude economy supply chain.
(The author, Cai Yinyin, is a professor at Nanjing University of Information Science and Technology and the chairman of the Low Altitude Economy Professional Committee of the China Meteorological Service Association.)
