Developing Russia’s Low Altitude Economy & Civilian Cargo Drones: Waiting For Lift Off

The global market for commercial drone delivery systems will grow by more than 40% annually in the near future, according to analysts, who consider air delivery systems to be part of a new low-altitude economy that includes air taxi, sightseeing and cargo transportation. By 2030, the volume of the low-altitude economy in China alone should exceed US$280 billion. Russia though is not lagging behind the development of drones, however, distracted by the military applications still has to turn its attention to the civilian economic development.

In June 2024, Russian President Vladimir Putin signed a law covering ‘Unmanned Aircraft Systems’ that allows Russian developers and manufacturers of unmanned aircraft systems and their components to receive government support. In addition, a unified register of manufacturers of autonomous systems will be created. The procedure for forming and maintaining the unified register will be approved by the government, which will be maintained by the Russian Ministry of Industry and Trade.

In December 2024, Putin stated that he “was surprised” by a decline in the development of the Unmanned Aircraft Systems project, stating that “We are looking at the plans that the government has outlined to reduce some indicators of the total volume of the Russian market for unmanned aircraft systems, and the number of Russian companies equipped with universal infrastructure to ensure the flight of these systems” when speaking at the Council for Strategic Development and National Projects. Putin pointed out that the number of Russian operators equipped with universal infrastructure to ensure flights by 2030 instead reduced from 89 to 9 units.

In addition to the lack of Russian infrastructure, the situation has not been helped by direct bans on the operation of cargo drones, which were introduced for security reasons related to the Ukraine conflict. However, during 2024, in some Russian regions, drone flights are allowed within the operator’s line of sight and no higher than 150 metres. Should the Ukraine conflict be resolved, then Russia’s domestic low-altitude economy may begin to show significant signs of lift-off, and especially so since Russian drones have been operating in conflict zones with operators that now have plenty of experience of working amongst difficult conditions. It is really a matter of when, not if.

Pointing the potential ahead are the Chinese. They believe that safety standards can be observed without completely destroying the low-altitude economy. The same opinion is shared by other countries that issue licenses for the organisation of commercial delivery systems using drones, such as the UAE.

China’s Xinhua, the government mouthpiece, has said that “The low-altitude economy, which includes delivery via drones and flying cars, has been actively developing in China in recent years amid efforts by local governments to support the development of new opportunities to increase consumption.”

There has been significant progress. The value of China’s low altitude economy at the end of 2023 was estimated at almost US$70 billion. By 2030, this is expected to rise to US$280 billion as consumer supply chains radically adapt to include Unmanned Aircraft Systems.

As an example, China’s Meituan began exploring the possibilities of drone delivery to accelerate the creation of a local express delivery network based on ground-to-air-to-ground interaction. In 2021, it launched its first commercial delivery service in Shenzhen, a technology hub in southern China. At the end of 2024, Meituan announced that its subsidiary Keeta Drone, which provides drone deliveries, has received a commercial license to operate drones beyond line of sight from the Dubai Civil Aviation Authority. Now Meituan provides fast delivery of food, medicines and other basic necessities to the areas specially designated for piloting, and as of December 2024, has opened 53 routes in major cities of China, and completed more than 400,000 deliveries. The service offers customers a wide range of products in a wide variety of locations, from offices, residential neighbourhoods, libraries and to tourist sites such as the Great Wall of China.

Chinese agricultural delivery drones are also known to Russian military personnel as the Ukrainian Baba Yaga attack drones, which are capable of dropping mines and other explosive devices. In peacetime, agro-drones are widely used in conjunction with unmanned vehicles. In China, Harvesting drones are now delivering oranges directly from mountain gardens to farmers’ homes. Previously, this crop transportation required three hours, but now it takes only ten minutes. In addition, self-driving cars are used to deliver oranges to customers. The Chinese logistics company ZTO Express tested the “drone + unmanned vehicle” model to improve service efficiency. To date, the number of applications of drones in the their express delivery service has exceeded one million deliveries. Clearly, Russia is learning, albeit with predominantly military applications, but the future of civilian drones is coming to Russia as well.

In addition to drones, small airships are also part of the global low-altitude economy. In early August 2024, the civilian manned airship AS 700 made its first demonstration flight, flying at a speed of 60 km/h at an altitude of 500 m. The AS 700 model is a type of single capsule manned airship with a maximum capacity of 10 people, including the pilot. These new craft can reach speeds of up to 100 km/h. The airship is designed for a maximum flight range of 700 km, it is able to stay in the air for up to 10 hours. It has been designed for tourist trips. In April of this year, China announced the launch of mass production of airships for air tourism.

New helicopter taxi routes are also being created in China’s low-altitude economy segment. These are used for flights to airports or between neighbouring cities. The travel time is reduced from a few hours to a few minutes. Connectivity problems between Moscow’s Domodedovo and Sheremetyevo airports for example could be easily solved using this new type of service, as could connectivity and supply chain development in Russia’s more remote communities. 50% of Russia’s population continues to live in relatively small villages. Bringing them into the mainstream Russian economy would be a massive boost to the national economy.

What Russia needs is the private sector to start getting serious about these potentials. The Ukraine situation is likely to be resolved soon – with the opportunity steps ahead in developing Russia’s low-altitude economy appearing increasingly attractive.