Barq Group has signed a strategic agreement with US-based autonomous aircraft developer Elroy Air to establish a $200 million joint venture focused on manufacturing advanced cargo aircraft in Abu Dhabi.
The memorandum of understanding, signed on January 8, sets out plans to build a dedicated production facility for Elroy Air’s Chaparral aircraft, an autonomous hybrid-electric vertical take-off and landing cargo system designed for middle-mile logistics operations.
According to a statement, the facility will manufacture Chaparral systems for both commercial and humanitarian customers across the Middle East and North Africa, subject to regulatory approvals. The joint venture will also provide aftermarket services, including maintenance, repair and overhaul.
Barq Group, which operates in smart mobility and logistics across the region, said the move reflects rising demand for autonomous delivery solutions in markets requiring resilient and flexible logistics infrastructure.
The Chaparral aircraft is capable of transporting 300 lbs of cargo over a range of 300 miles. Its hybrid-electric system allows long-distance missions without charging infrastructure, making it suitable for varied operating environments. The aircraft achieved a milestone in November 2023, completing the world’s first flight of a turbogenerator-hybrid-electric aircraft.
Barq Group chief executive Ahmed AlMazrui said the partnership highlights Abu Dhabi’s growing role in next-generation transport technologies.
“Our partnership with Elroy Air is a testament to Abu Dhabi’s position as a global leader in the future of mobility. This $200 million investment is more than a manufacturing agreement; it is a commitment to building a self-sustaining aerospace ecosystem in the UAE. The massive demand we are seeing from logistics providers across MENA makes it clear that local production is the only way to scale effectively.”
“Together, we are redefining how goods move across the region while supporting the ‘Make it in the Emirates’ initiative,” he stated.
The project aligns with Abu Dhabi’s Smart and Autonomous Vehicle Industry (SAVI) cluster, which aims to position the emirate as a centre for sustainable and autonomous transport. The venture is also expected to generate high-skilled aerospace roles and support the growth of a regional supply chain.
Elroy Air chief executive Dr Andrew Clare said demand for the Chaparral in the MENA region had exceeded expectations.
“Demand for the Chaparral in the Mena region has been immense, surpassing our initial projections and highlighting the urgent need for infrastructure-independent logistics.”
“Abu Dhabi is the ideal strategic hub for our first international manufacturing footprint. By producing the Chaparral locally with Barq Group, we are not only reducing lead times for our regional customers but ensuring the aircraft is built in the same environment where they will operate. We are thrilled to partner with a visionary leader like Ahmed AlMazrui to bring this next-generation capability to the UAE,” he added.
The agreement follows Elroy Air’s recently announced US production partnership with Kratos. Clare said global demand for the Chaparral now exceeds 1,500 units, with orders from logistics and aviation services firms including FedEx, Bristow and LCI.
Elroy Air has also completed its first autonomous point-to-point cargo delivery using the Chaparral platform.
Following the completion of flight testing and regulatory approvals in the United States, Barq Group and Elroy Air plan to begin initial flight operations in the UAE in 2027 using US-built aircraft. Local manufacturing in Abu Dhabi is expected to commence in 2028, Clare added.
