Guosen: General aviation in China is facing new development opportunities, focusing on three factors: policy, technology, and marketization.

Guosen released a research report stating that China's general aviation industry is experiencing new opportunities being jointly driven by policies, technology, and market. Low-altitude economy has become a national strategy, with unmanned drones and eVTOL technology leading globally. In the short term, the industry will focus on high-value specialized scenarios such as maritime transport, following the development path of "cargo first, passengers later." Compared to the United States, China still has huge potential in terms of infrastructure and fleet size. Guosen's main points are as follows: General aviation focuses on aircraft manufacturing and flight activities, encompassing all flight activities other than military and civilian passenger and cargo flights. General aviation has characteristics of flexibility and personalized services, with a wide operating range, low airspace, and strong operability, involving diverse civilian fields. Traditional general aviation aircraft mainly consist of fixed-wing aircraft and helicopters, with mature technology and applications. Emerging general aviation aircraft, on the other hand, are represented by drones and eVTOL, characterized by intelligence, unmanned operation, and green technology. The new development opportunities in China's general aviation industry are mainly driven by three factors: policy, technology, and market. In terms of policy, the rise of low-altitude economy has become a national strategy, prompting reforms in airspace management systems and facilitating the improvement of general aviation infrastructure and operational systems, creating favorable conditions for industry development. Technologically, Chinese companies have globally led in the development and manufacturing of general aviation aircraft, as well as in securing airworthiness certificates for drones and eVTOLs. Industrialization-wise, China will implement large-scale application scenario expansion actions, with the economic feasibility of low-altitude operations expected to significantly increase in the future. In the short term, the industry's specialized operations will focus on high-value, specialized, and economic considerations. The global general aviation market as a whole is experiencing growth, with annual deliveries exceeding 4,000 units for two consecutive years. In 2024, the annual delivery of general aviation aircraft worldwide reached 4,197 units, totaling $31.9 billion. North America accounted for 70.4% of global deliveries, with the Asia-Pacific region experiencing the fastest growth. Fixed-wing aircraft are the mainstay in the general aviation market, representing 75.3% of global deliveries, with the market trending towards high-value aircraft models. According to Global Market Insights, the global market size of general aviation aircraft is expected to reach $40.2 billion by 2029, with a compound annual growth rate of 4.72%. The traditional general aviation aircraft manufacturing sector is currently dominated by European and American companies, with high market concentration. The market concentration of fixed-wing aircraft, helicopters, and gliders all exceeds 50%. In 2024, the top three fixed-wing aircraft manufacturers were Cirrus Aircraft, Diamond Aircraft Industries, and Piper Aircraft. Through international acquisitions, China's resource integration has allowed for deep involvement in global market competition, with acquisitions like Zhejiang Wanfeng Auto Wheel's acquisition of Diamond Aircraft Industries and Aviation Industry Group's acquisition of Cirrus Aircraft yielding positive results. Low-altitude application scenarios are gradually expanding, with high entry barriers, significant Matthew effects, and short-term focus on scalable operations in maritime transport, port navigation, and logistics distribution. General aviation operations are a core industry in the general aviation supply chain, characterized by significant differences in operations, complex operating environments, large operational volumes, high requirements for production safety, and barriers in terms of capital, technology, management, and operational qualifications. The development path for low-altitude applications in China is clear: prioritizing cargo before passengers, isolation before integration, and outskirts before urban areas. As new aircraft technologies mature, the reduction in acquisition costs, energy costs, personnel costs, and operation and maintenance costs will bring better commercial viability to low-altitude operations. In comparison with the United States, China's general aviation development has immense potential. The United States is a benchmark for global general aviation industry development. In comparison, China has huge development space in terms of infrastructure scale, aircraft quantity, and flight usage structure. By the end of 2024, the number of registered general aviation airports in the United States was approximately 40 times that of China, the fleet size of general aviation aircraft was about 65 times that of China, and the flying hours in general aviation were about 19 times that of China. In the future, China is expected to achieve scale growth in high-value niche markets such as short-distance general aviation transportation and charter flights. Risk warnings: 1. Slow progress in low-altitude policy development; 2. Slow progress in low-altitude economic infrastructure construction; 3. Slow progress in key technological developments; 4. Risks of deviations in related data and industry size estimates.