Over the past two years, the low-altitude economy has been anything but short of hype: new aircraft models are unveiled one after another, intent orders have surged from dozens to hundreds of units, and urban vertiports continue to open.
On the evening of October 26, CITIC Offshore Helicopter (COHC), the most established player in this sector, released its Q3 report. Net profit attributable to shareholders for Q3 was CNY 6.5 million, a year-on-year drop of 92.87%.
The narrative side sees a new development every day, while the operational side faces downward revisions every quarter. This is the most real dichotomy in the low-altitude economy of 2026.
As someone on the front lines of low-altitude operations, my first reaction to this financial report wasn't "it dropped," but rather relief that someone finally laid out the books honestly.
I. Unpacking the Numbers: Asset Clearing Is Real, and So Is the Context
CITIC Offshore Helicopter is the only listed company on A-shares whose primary business is helicopter operations. With over forty years of general aviation experience in offshore oil, emergency rescue, power line inspection, and port pilotage, it holds the oldest license in China's general aviation industry.
It doesn't tell eVTOL stories or talk about air taxis. It does just one thing: fly aircraft and collect revenue.
| Metric | Value | YoY Change |
| Revenue | CNY 486 million | -18.33% |
| Net Profit Attributable to Shareholders | CNY 6.5024 million | -92.87% |
| Net Profit After Deducting Non-Recurring Items | CNY 13.2135 million | -85.55% |
Cumulative for the First Three Quarters:
| Metric | Value | YoY Change |
| Revenue | CNY 1.494 billion | -8.51% |
| Net Profit Attributable to Shareholders | CNY 132 million | -46.12% |
| Net Profit After Deducting Non-Recurring Items | CNY 139 million | -43.32% |
| Net Operating Cash Flow | CNY 537 million | -21.55% |
| Gross Margin | 18.24% | -6.44 percentage points |
A easily overlooked comparison here: Revenue fell only 8.51% in the first three quarters, but dropped 18.33% in Q3 alone. The decline is accelerating; July to September was the toughest quarter so far this year.
Looking at the 92.87% plunge in isolation suggests operational collapse. However, the income statement shows three one-time items being cleared simultaneously:
• Aviation Material Impairment: Cumulative provision of CNY 19.7061 million in the first three quarters (only CNY 0.001 million last year). The report states clearly: provision for impairment of aviation materials—approximately CNY 9 million recognized in Q3.
• Loss on Disposal of Engine Assets: CNY 9.4963 million (compared to a gain of CNY 0.0057 million last year), fully recognized in Q3.
• Investment Income: -CNY 5.2913 million (cumulative for the first three quarters), reflecting a YoY decline in investment income from associates.
The portion falling in Q3 totals nearly CNY 20 million—more than the entire net profit for Q3.
Two opposing items provided some help during the same period: Financial expenses decreased by 61.44% due to lower exchange losses (saving CNY 13.56 million in the first three quarters), and credit impairment losses were reversed by CNY 5.86 million (recovery of overdue receivables).
However, before interpreting this report, context must be added: In Q3, general aviation experienced a widespread tightening of operations, with resumption proceeding in batches—prioritizing essential production tasks and emergency rescue first, followed by training, with commercial operations last. There was no unified public timeline for this tightening; industry participants had varying experiences. For operators, the most direct description of these three months was: flight hours were governed by a safety-related schedule, not by market orders.
This context changes the interpretation: The 18.33% drop in Q3 revenue cannot be entirely attributed to "demand"—partly because supply actually stopped, and partly because traditional workloads like offshore oil and gas contracted naturally. The three one-time items can only be understood against the backdrop of "sharply reduced flight hours": fewer missions led to material impairments; aircraft no longer intended to fly led to engine disposals.
Strictly speaking, Q3 wasn't an "operational collapse," but a combination of "flight suspension compressing supply + clearing of one-time items."
Yet, both asset clearing and flight suspensions will pass. What won't come back on its own is discussed next.
II. Gross Margin Is What Really Matters
Gross margin stood at 18.24%, down 6.44 percentage points YoY.
Breaking it down makes it clearer: Gross margin was still 19.58% in the first half, but dropped to around 15.5% in Q3 alone.
This figure is far more significant than the 92.87% drop. Impairments can be one-time; suspensions can be temporary; gross margins are persistent.
What do 6.44 percentage points mean?
To illustrate: For the same mission, last year you might have kept CNY 25, but this year only CNY 18.2 remains. As revenue shrinks, gross profit per unit of revenue shrinks even faster.
Squeezing from both supply and demand sides can be mitigated by regulatory easing and order recovery; cost structure issues won't fix themselves with easing. The latter is more troublesome.
How rigid are general aviation operating costs?
• Aviation Materials: Primarily imported parts; exchange rates, tariffs, and supply chain cycles are beyond your control.
• Maintenance: Scheduled inspections and major overhauls must follow manufacturer manuals strictly; not a minute can be saved.
• Insurance: Fleet size, flight hours, and accident records determine premiums; limited negotiation leverage.
• Crew: Licensed pilots are scarce resources; labor costs only rise, never fall.
These four items constitute the bulk of operating costs and do not change linearly with flight hours.
When flight volume drops, costs don't drop proportionally.
This is the leverage of general aviation operations—great when flying high, painful when flying low.
III. Clearing While Investing: Not Contraction, But Switching Tracks
Two actions in the financial report point in opposite directions, yet together form a complete narrative.
Action One: Clearing Old Assets.
• Provisioned CNY 19.7 million for aviation material impairment.
• Recognized CNY 9.5 million loss on engine disposal.
• Subsidiary Haizhi Tonghang plans to dispose of two Ka-32 helicopters, with an initial listing price of CNY 172 million.
The Ka-32 is a coaxial rotor model focused on lifting and firefighting. Supply of aviation materials and maintenance support for such models is becoming increasingly difficult; operators are well aware of this. Impairment provisions, engine disposals, and whole-aircraft sales all point to the same judgment: actively reducing heavy assets associated with legacy models.
Action Two: Investing in New Entities.
Long-term equity investments rose from CNY 20.56 million to CNY 41.68 million, an increase of 102.68%. The report specifies two destinations: additional investment in Zhejiang General Helicopter Co., Ltd.; and new equity investment in Sichuan Chuanfa Low-Altitude Economy Operations Co., Ltd.
Reducing old heavy assets while investing capital into new operating entities isn't contraction—it's switching tracks.
The traditional general aviation model of "buying planes, maintaining fleets, and bearing repair costs independently" is being replaced by a lighter "operating platform + resource integration" model in the new cycle of the low-altitude economy.
For a company of CITIC Offshore Helicopter's scale to make this move is itself a signal.
IV. Three Hard Warnings for eVTOL Operators
As a frontline low-altitude operator, the most striking aspects of this report are threefold.
First, aviation materials and maintenance will eat up all your gross profit.
eVTOLs are still in early stages, and many use the logic of "electricity is cheaper than fuel" when calculating costs. True, energy costs are indeed lower. But the major cost drivers for aircraft have never been energy—they are aviation materials, maintenance, scheduled inspections, and airworthiness compliance.
CITIC Offshore Helicopter's gross margin dropped from 25% to 18%; not a single cent of that drop was due to aviation fuel.
Over the full lifecycle of an aircraft, procurement costs may account for only 40%, with the remaining 60% paid slowly over the next twenty years. By the third or fifth year of eVTOL operations, the same bill will arrive—and the quiet period of no major overhauls in the first two years of a new model is precisely when business plans are most likely to be optimistic.
Second, don't use "flight hours" as the sole basis for cost allocation.
CITIC Offshore Helicopter's Q3 revenue fell 18.33%, but costs didn't fall proportionally. Fixed costs—crew, insurance, airworthiness management, base operations—don't decrease just because you fly less.
In operational modeling, always split costs into "variable with flight hours" and "fixed regardless of flight hours": Calculate daily fixed costs per aircraft, divide by sellable flight hours, and derive the break-even hourly rate.
The former manages marginal profitability; the latter determines survival.
Many low-altitude project business plans mix these two categories, resulting in attractive figures that collapse upon implementation. Reporting hourly rates below the break-even line means losing money on every hour flown—the more you fly, the faster you lose.
Third, heavy assets are not a moat; they are shackles.
CITIC Offshore Helicopter has over forty years of accumulation, a fleet of dozens of aircraft, and nationwide bases—these are barriers to entry, but also burdens.
When demand declines, larger fleets face greater impairment pressure. The CNY 19.7 million aviation material impairment in Q3 was essentially paying for materials bought in the past and aircraft flying less now—impairment isn't an accident; it's the delayed cost of the heavy-asset model.
New entrants shouldn't rush to buy aircraft. Use a light model of "capacity procurement + operating platform" to validate scenarios first, then discuss assets once order density stabilizes.
This is what CITIC Offshore Helicopter is doing, and what new companies should do from the start.
In Closing
The low-altitude economy hasn't lacked stories in the past two years.
New models launch one after another; new narratives emerge daily.
But what truly determines whether this industry can stand firm isn't the number of orders, but whether each flight hour can break even.
CITIC Offshore Helicopter's report is the only ledger on A-shares that lays bare "whether flying one hour makes money." It's not sexy; it's even a bit ugly. But it's honest.
The 92.87% drop includes one-time clearings and amplification from suspensions—both will pass.
The 18.24% gross margin is what needs long-term monitoring—it defines the industry's ceiling.
Nearly simultaneously, on the afternoon of October 27, Hangzhou Yuhang City North MixC opened Hangzhou's first composite commercial complex low-altitude delivery vertiport: a 50-square-meter double-deck container, with the ground floor hosting low-altitude themed commerce and the upper floor serving as a landing/takeoff platform, enabling "drone + ground courier" relay delivery within the mall. Since the beginning of this year, Yuhang has built 4 landing fields and 122 landing points.
A helicopter giant earning CNY 1.63 million in a quarter versus a 50-square-meter commercial vertiport opening—these are the two faces of the low-altitude economy right now. The former's books show how hard this business is; the latter's deployment reminds us where opportunities lie.
Stories can run ahead, but the books must balance first.
Flying is a capability; staying is a skill. This can be interpreted as: Flying is a capability; breaking even is the true skill.
Data Sources: CITIC Offshore Helicopter Q3 2026 Report (CNINFO), Securities Star. Information on Yuhang landing points comes from public releases by the Yuhang Transportation Department. The author holds no shares in CITIC Offshore Helicopter and has no business or interest relationships with the company.
This article is an industry operational analysis and does not constitute investment advice.
—— Originally published on WeChat Official Account "Jing Zhe, Summer of West Creek" ——