On September 22, 2026, a hybrid aircraft-vehicle lifted off from a square in Dunhuang, Gansu province, completing a circling flight and stationary hover at 30 to 50 meters. The same day, the Dunhuang city government signed a strategic cooperation framework agreement with GAC's Govee unit to launch a low-altitude transport-tourism hub demonstration project. A day earlier, Zhejiang province announced plans for a 30 billion yuan (about $4.2 billion) AI-plus-remote-sensing satellite constellation, targeting 1,000 satellites in orbit by 2030.
These two events represent the two visible layers of China's low-altitude economy: ground-level scenario validation and space-based infrastructure. But according to a detailed analysis by Huxiu, the real bottleneck is neither aircraft capability nor satellite networking, but the middle layer: the low-altitude operations management system. This includes airspace classification and approval rules, communications, navigation and surveillance, weather intelligence, flight services, safety oversight, and insurance and liability allocation. Even more constraining is the demand side, which remains heavily dependent on policy and local government budgets, with genuine market demand yet to be proven.
Dunhuang's real numbers
Dunhuang's low-altitude tourism has already generated concrete operational data. According to a June 2026 report from People's Daily's Gansu channel, Dunhuang Feitian General Aviation invested 120 million yuan (about $16.9 million) to build two general aviation airports at the Singing Sand Dunes and Crescent Moon Spring scenic area and the Yardang National Geopark, equipped with 36 aircraft including helicopters, fixed-wing planes, and powered paragliders. In 2025, the fleet logged more than 15,000 flight sorties, carrying over 30,000 sightseeing passengers, a new record. The long-distance air tour route from Singing Sand Dunes to Yardang completed its maiden flight. Hot air balloon operations recorded more than 970 ascents and 5,500 passengers.
Huxiu notes that even under the most conservative assumption—that all sorties were passenger-carrying—the average load is just two passengers per flight. But the figure includes non-passenger training and ferry flights, so the actual average for revenue flights is higher. For one-to-two-seat aircraft like powered paragliders, that may approach full capacity. The data confirms scale and passenger flow, but does not prove poor load factors. What remains unclear is the share of high-fixed-cost helicopters and their utilization rates, which public data does not break down.
The Dunhuang project follows a government-enterprise collaboration model: the government provides scenic sites and tourism resources, while Govee supplies aircraft development and operations. Govee selects sites based on three hard criteria: tourist volume, airspace conditions, and local government willingness to build takeoff and landing facilities. Dunhuang operates in a closed trial airspace, so replicating this model depends on local government airspace authorization and unique tourism IP. The National Development and Reform Commission has set an 18-character policy guideline: “cargo before passengers, isolation before integration, suburbs before city centers.” Tourism is the policy-approved first scenario.
But being first doesn't guarantee scalable success. Tourism has fragile unit economics: low ticket prices, low turnover, high fixed costs, and vulnerability to weather and seasonality. Dunhuang's flyable days under strong winds and sandstorms directly determine the operating model.
EHang's cautionary tale
EHang provides a clear reference—but as a counterexample. Its EH216-S has obtained all four certificates (type certificate, production certificate, standard airworthiness certificate, and operation certificate) and is the first company globally, within public disclosures, to sell tickets to the public for crewed autonomous eVTOL flights. In March 2026, it began public ticketing at the Suigang Wharf in Guangzhou and Luogang Park in Hefei, with early-bird fares of 299 yuan (about $42) for a roughly 3.5-minute flight. Since receiving its operation certificate in March 2025, the two locations have logged over 3,000 safe flights with zero incidents, and more than 40 operation points have been built nationwide.
Yet EHang's financials tell a different story. First-quarter 2026 revenue was just 25.7 million yuan (about $3.6 million), down 85.6% quarter-over-quarter, with a net loss of 126.4 million yuan (about $17.8 million). The company delivered only four EH216-series units in Q1, versus 61 EH216 and 5 VT35 units in Q4 2025. Q2 deliveries rebounded to 36 units, up 800% quarter-over-quarter, with revenue rising to 77.9 million yuan (about $11 million), a 203% increase. First-half total revenue was 104 million yuan (about $14.6 million), just 17.3% of the 600 million yuan annual target, which the company withdrew in its Q2 report.
EHang's COO Wang Zhao attributed the slowdown to a more cautious regulatory environment, saying that “approval, delivery, acceptance, and commercial operation timelines for some projects have slowed.” CFO Yang Jiahong was blunter: the timing of domestic commercial operations faces significant uncertainty. But Huxiu argues that regulatory slowdown alone doesn't explain the situation. Delivery volatility—66 units in Q4 2025, four in Q1 2026, 36 in Q2—suggests order lumpiness rather than a trend shift. More worrying, accounts receivable nearly doubled from 58 million yuan in 2024 to 112 million yuan in 2025, while revenue fell from 456 million to 418 million yuan, and operating cash flow swung from a positive 158 million yuan to a negative 180 million yuan. Most buyers are local state-owned enterprises. This suggests that even when aircraft are delivered, payments are slow, pointing to weak municipal finances and a lack of genuine market demand.
Huxiu also calculates EH216-S unit economics: a price exceeding 2 million yuan (about $281,700), battery life of 800–1,000 cycles with replacement costs over 300,000 yuan (about $42,300), a 120-minute charge time, and a 20–25 minute range. Even under optimistic assumptions—five flights per day, 250 flyable days, full load, and the lowest early-bird fare—annual revenue would be about 750,000 yuan (about $105,600). That barely covers battery depreciation (about 470,000 yuan per year) and maintenance (about 120,000 yuan), leaving nothing for acquisition costs, insurance, or other fixed expenses. In reality, flyable days are fewer and load factors lower, making the model even harder to sustain.
The contrast between Dunhuang and EHang reveals the core issue: Dunhuang validates the pre-certification phase—can aircraft fly, will tourists pay, will local governments support? EHang tests the post-certification phase—can the market run on its own once all approvals are in place? Together, they show that the gate is not before certification but after it.
The low-altitude economy's infrastructure has three layers: ground (takeoff and landing sites, charging, maintenance), the operations management system, and space-based assets. The ground layer is being validated through projects like Dunhuang; the space layer is being built via constellations like Lingjing. But the operations management system remains fragmented, with inconsistent standards and no cross-regional connectivity. According to CAAC data, 46 low-altitude flight service stations have been built and networked, covering 23 provinces. Shenzhen has deployed 220 5G-A base stations with integrated sensing and communication, and plans to build over 1,200 takeoff and landing points by end-2026. But experts cited by Huxiu, including Zhang Guanghou of the Chinese Academy of Social Sciences and Zhang Haijun of Suzhou JiaoKe, point to structural airspace shortages, fragmented management, and a lack of legal authority for local airspace management. Liu Chuanjian, a National People's Congress deputy, complained of inconsistent data formats and incompatible equipment brands, calling for a “single sky network and unified ground coordination.”
Policy is responding. On February 12, 2026, the NDRC, the financial regulator, and CAAC jointly issued guidelines on low-altitude insurance, aiming to establish mandatory liability insurance for unmanned aircraft by 2027 and a comprehensive framework by 2030. This addresses the liability question—who pays when something goes wrong—which is a prerequisite for scaled operations in integrated airspace. But as Huxiu concludes, technology is only the vehicle; the real gate is the system that governs it.
