Future is in the air

IMAGINE a future where drones deliver parcels, air taxis ferry passengers and unmanned aircraft conduct surveillance, with minimal human intervention.

That is the promise of a successful low-altitude economy (LAE).

But there’s more. LAE goes beyond drones to encompass cargo aircraft, autonomous systems and, eventually, passenger-carrying electric vertical take-off and landing aircraft.

And for Malaysia, that future is no longer distant.

About 200,000 drones are registered with the Civil Aviation Authority of Malaysia (CAAM), although the actual number operating is estimated to be twice of that.

Malaysia already regulates specific drone activities, including for agriculture, drone light shows and certain surveillance trials.

But as drone numbers and operational complexity grow, the challenge is now to create a framework that allows the industry to scale safely.

Malaysia Drone Chamber of Commerce and Industry president Elanggovan Thanggavilo says LAE should not be defined by a fixed altitude, but by the type of operation, technology and risk involved.

“A small drone flying a low-risk inspection mission and a passenger-carrying eVTOL operating at a similar altitude are very different activities,” he tells StarBiz 7.

As the low-altitude economy develops, Elanggovan says unmanned traffic management (UTM) systems would become increasingly important in managing the growing activity.

He said UTM would need to work alongside the existing air traffic management system, which manages conventional aircraft, so that both manned and unmanned aircraft can safely share the same airspace.

Supporting technologies such as digital identification and remote identification would also become important as more autonomous drones take to the skies, he adds.

Elanggovan adds that the regulatory process itself needs to be simplified.

Operators currently have to deal with CAAM, the Standards and Industrial Research Institute of Malaysia, Malaysian Communications and Multimedia Commission (MCMC), Department of Survey and Mapping Malaysia, Customs, security agencies and local authorities.

“Malaysia should make compliance easy, but enforcement strict,” he says.

The country, he adds, should eventually move towards a single digital gateway where operators can manage registrations, permits and other approvals through one platform.

Drones already delivering

The benefits of drone technology are already being seen on the ground.

One example is IDC Agricultural Services Sdn Bhd, which uses drones to tackle bagworm outbreaks in oil-palm estates.

Since 2023, the company has undertaken 84 projects covering more than 8,300ha, with the total area treated now approaching 9,000ha.

Its managing director Tunku Aznal Shahbudin Tunku Kamel says drone spraying can cut chemical use by about 70% as it applies pesticides directly to the crown of the palm.

It also reduces workers’ exposure to chemicals.

The wider benefit, however, could be in helping estates make better use of a limited workforce.

Aznal says drones could take on more mechanised tasks, allowing workers to focus on harvesting, which remains one of the biggest bottlenecks in plantation operations.

But adoption remains a challenge, particularly among smallholders who may lack the capital to invest in the technology.

He says farmers also tend to be cautious about new technology because the benefits from treating oil palms may only become visible months or even years later.

Daniel Chow, principal at Arthur D Little South-East Asia, says drone delivery could be the next step for operators looking to improve efficiency and profitability.

“Logistics costs in South-East Asia (including Malaysia) are already reaching ‘rock-bottom’ levels, making the adoption of drone deliveries a necessary next step for logistics operators to further optimise profitability,” Chow notes.

Regulatory certainty, he says, will be crucial for companies to invest in and scale drone deliveries and broader autonomous logistics.

“Besides regulatory basics such as clear operating permissions, certification standards and traffic management and airspace coordination, the Malaysian logistics sector will also look for robust remote operations and monitoring standards, alongside clear safety and liability rules, especially for parcel and medical delivery use cases,” he adds.

Chow applauds Malaysia for taking a broader approach by linking LAE with smart-city infrastructure and autonomous logistics, rather than developing it as a standalone sector.

He points to initiatives like the National Technology and Innovation Sandbox which provides regulatory facilitation and testing grants for real-world drone applications.

These efforts are backed by infrastructure such as the Droneport-1000 project at Universiti Selangor, which covers 24 sq km of designated airspace and allows drone testing at altitudes of up to 1,000m.

“This land area is approximately 10% the size of Kuala Lumpur city,” he says.

He adds that another potential application is a planned drone-based medicine delivery in Tawau, Sabah, backed by the MCMC and the Health Ministry.

The pilot project, expected in late 2026, could serve about 12 remote villages.

The development of the LAE is also becoming a regional race, with neighbouring countries stepping up.

Chow says Singapore is developing a national unmanned aircraft traffic management platform, while Thailand is testing autonomous aerial vehicles.

Indonesia, too, is strengthening its domestic drone supply chain.

Building the ecosystem

For Malaysia to capture more of the economic value from LAE, however, the country will also need to look beyond operating drones made elsewhere.

Selangor Information Technology and Digital Economy Corp (Sidec) chief executive officer Yong Kai Ping says there are many companies in Malaysia involved in servicing drone technology, but fewer that actually design and manufacture the technology.

“If you’re just a servicing company, you don’t own the technology. You’re using other people’s product designs,” he says.

“What we want is to design and manufacture the technology here.”

Sidec is looking to build capabilities across the technology supply chain, from design and manufacturing to testing and packaging, including through investments in integrated circuit design companies.

Its RM100mil Ehsan Capital fund, known as the Selangor Semiconductor Fund, was set up to support local high-tech startups in areas such as chip design and technology.

Sidec is also looking to coordinate companies so local chips and software can be incorporated into LAE technologies.

Yong expects Malaysia to be capable of producing fully designed and manufactured local chip solutions within the next one to two years.

CAAM launched a public consultation on Aug 3 for the proposed Malaysia LAE Framework.

The consultation closes on Sept 2 at 5pm, with the framework expected to be finalised by year-end.

“We don’t want to go too fast, but we also don’t want to regulate too much that it starts to distort the development of LAE,” CAAM chief executive officerf Captain Datuk Norazman Mahmud said earlier this month.

Norazman says about 14 ministries and agencies are involved in governing activities related to the sector.

A key part of the framework is CAAM’s UAS Traffic Management system, for which the concept of operations is expected by year-end.

The system will allow drone operators to register their aircraft and operations digitally, while assessing proposed flights against restrictions such as prohibited areas and altitude limits.

Malaysia already has a mature civil aviation system, with about 3,500 aircraft movements a day supported by 29 air traffic control towers and around 1,000 air traffic controllers.

The challenge now is to safely integrate a growing number of unmanned aircraft into this established system.

Norazman adds that CAAM is also undertaking a major review of Malaysia’s civil airspace along the west coast – from Penang to Johor – to support aviation requirements over the next decade.