Malaysia is seeking to position itself as a regional leader in the emerging low altitude economy (LAE), with the government working on a regulatory framework to support new aviation technologies such as drones, air taxis and electric vertical take-off and landing (eVTOL) aircraft, its Transport Minister Loke Siew Fook said Tuesday.
He said the sector has the potential to reshape transportation, logistics and economic development, but stressed the need to balance innovation with safety oversight.
Speaking at the inaugural Low Altitude Economy Forum 2026, Loke said Malaysia must avoid over-regulation that could stifle growth, while ensuring sufficient safeguards for passengers, cargo and airspace management.
“We do not want to over-regulate to the point of killing off the industry. But at the same time, safety must be taken into account. This balance is important,” he said.
Loke said the Civil Aviation Authority of Malaysia (CAAM) has been tasked with developing a comprehensive regulatory framework for the LAE sector, which he described as a potential new engine of economic growth.
He added that Malaysia already has early use cases for low-altitude technologies, particularly in agriculture, where drones are being used for crop monitoring and pesticide spraying across durian farms in Negeri Sembilan and Pahang, as well as palm oil plantations in Johor and Sabah.
In healthcare, pilot projects involving medical drone deliveries have been introduced in Sabah and Pahang, reducing delivery times for medical supplies and cutting logistical costs in remote areas.
Loke also highlighted potential applications in infrastructure monitoring, citing railway cable theft incidents that have caused significant delays on rail networks, suggesting artificial intelligence (AI)-powered surveillance drones as a possible solution.
Beyond logistics and public services, he said the LAE could create high-income jobs while expanding demand for technical and vocational training.
Looking ahead, Loke said Malaysia could eventually see passenger-carrying eVTOL aircraft deployed in tourism destinations such as Tioman, Perhentian, Mabul and Sipadan islands, offering greener alternatives to conventional transport and reducing the need for large-scale infrastructure development.
He also suggested that eVTOL services could one day support rural air connectivity in Sarawak, linking remote areas such as Long Akah, Long Banga and Bario with urban centres including Miri and Bintulu, provided supporting infrastructure is in place.
Loke said the LAE ecosystem extends beyond mobility, encompassing semiconductors, artificial intelligence, robotics, smart cities and advanced manufacturing, creating broader opportunities in engineering, maintenance and services.
He urged Malaysia to move beyond its traditional role in aviation maintenance, repair and overhaul (MRO) and instead take a more active role in designing and manufacturing future LAE systems.
“Malaysia must be a country of design and manufacture, not just maintenance and repair,” he said, adding that the country already has strong capabilities in electronics, aerospace engineering and aviation services across multiple industrial hubs.
Loke said Malaysia’s established aviation industry, digital economy and strategic location within ASEAN place it in a strong position to develop a competitive LAE ecosystem, provided policy, regulation and talent development evolve in line with technological change.
He also called on government agencies, industry players, academia and investors to work together to build the ecosystem.
“The success of Malaysia’s Low Altitude Economy will depend on our ability to work together with a shared sense of purpose,” he said, urging stakeholders to take a proactive leadership role rather than wait for global developments.
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