Barq Group and Elroy Air to establish Chaparral manufacturing joint venture in Abu Dhabi

Barq Group and Elroy Air have signed an initial agreement to form a $200 million joint venture for the manufacturing and servicing of autonomous cargo aircraft in the UAE.

Barq Group, a leader in smart mobility and logistics solutions in the MENA region, and Elroy Air, a US-based developer of autonomous aerial systems for middle-mile logistics, today announced the signing of the agreement, which establishes the framework for a joint venture (JV). The JV will invest $200 million to develop a state-of-the-art manufacturing facility in Abu Dhabi to produce the Chaparral, an autonomous hybrid-electric vertical take-off and landing (VTOL) cargo unmanned aircraft system (UAS).

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The facility will supply Chaparral systems to commercial and humanitarian customers across the Middle East and North Africa (MENA), subject to receipt of all necessary regulatory approvals. In addition to manufacturing, the JV will provide aftermarket services, including maintenance, repair, and overhaul (MRO). By establishing local production capacity, the partnership aims to meet growing demand for autonomous logistics solutions in a rapidly expanding region that requires resilient, middle-mile delivery infrastructure.

The Chaparral is an industry-first autonomous aircraft designed to carry 300 lbs of cargo over a 300-mile range. Its hybrid-electric powertrain enables long-range missions without reliance on charging infrastructure, making it particularly suited to the MENA region’s diverse operating environments. The aircraft achieved a global milestone in November 2023 with the world’s first flight of a turbogenerator hybrid-electric aircraft.

"Our partnership with Elroy Air is a testament to Abu Dhabi’s position as a global leader in the future of mobility," said Ahmed AlMazrui, CEO of Barq Group. "This $200 million investment goes beyond manufacturing, it represents a commitment to building a self-sustaining aerospace ecosystem in the UAE. Demand from logistics providers across MENA continues to grow, making local production essential to scale efficiently. Together, we are redefining how goods move across the region while supporting the ‘Make it in the Emirates’ initiative."

The joint venture aligns with Abu Dhabi’s Smart and Autonomous Vehicle Industry (SAVI) cluster objectives, reinforcing the emirate’s ambition to become a global hub for sustainable and autonomous transportation. The initiative is also expected to contribute to the local economy through the creation of high-value aerospace jobs and the development of a regional supply chain.

"Demand for the Chaparral in the MENA region has exceeded our initial expectations, highlighting the urgent need for infrastructure-independent logistics," said Andrew Clare, CEO of Elroy Air. "Abu Dhabi is the ideal location for our first international manufacturing footprint. Producing the Chaparral locally with Barq Group will reduce lead times and ensure the aircraft is built in the same environment in which it will operate. We are delighted to partner with Barq Group to bring this next-generation capability to the UAE."

Following Elroy Air’s recently announced domestic US production partnership with Kratos, the new JV will support a growing global backlog for the Chaparral, which already exceeds 1,500 units from leading logistics and aviation services companies, including FedEx, Bristow, and LCI. Elroy Air has also recently completed its first autonomous point-to-point cargo delivery using the Chaparral platform.

Following the successful completion of key flight milestones in the United States and receipt of all required approvals, Barq Group and Elroy Air plan to begin initial flight operations in the UAE in 2027 using US-built aircraft, followed by the start of local production in Abu Dhabi in 2028.