With the “Amazon effect” driving demand for rapid delivery of e-commerce goods, U.S. startup Elroy Air plans to fly a full-scale prototype of its unmanned cargo aircraft this year. The winged, hybrid-electric vertical-takeoff-and-landing aircraft is designed to carry 500 lb. of cargo 300 mi.
Elroy is working with the FAA and potential customers and hopes to begin operations as early as 2020, both internationally and domestically in the U.S. The company has so far raised $9.2 million in seed funding and plans a Series A round this year to fund the program through to deployment.
Elroy is targeting the point-to-point freight market now served by trucks, extending the range of express delivery to smaller communities. “Urban metro areas are enjoying the Amazon effect. We see an opportunity to expand the reach of expedited logistics,” says CEO Dave Merrill.
Hybrid-electric unmanned aircraft to fly 500-lb. cargo 300 mi.
Modular, preloaded cargo pods will speed turnaround times
The U.S. same-day delivery market was projected to reach $4 billion in 2018, a hundredfold increase in less than five years, according to an analysis by A.T. Kearney. The Amazon effect is putting pressure on other e-commerce companies to improve shipping times, says Kofi Asante, head of strategy and business development for Elroy. By serving smaller or more remote communities with unmanned cargo aircraft, “We can democratize expedited logistics,” he says.
The San Francisco-based startup has been flying one-sixth-scale models for the past 1.5 years to develop the aerodynamics and controls for the tandem-wing aircraft with both remotely piloted and fully autonomous end-to-end flights. The full-scale Chaparral aircraft will be 20 ft. long, with a wingspan of 30 ft. Cargo is carried in a modular pod that fits under the fuselage.
The hybrid-electric propulsion system comprises batteries that power six rotors mounted to two booms for vertical flight and an internal-combustion engine that powers a pusher propeller for horizontal flight and recharges the batteries. Hybrid-electric provides 10 times the range of batteries alone, says Merrill.
The aircraft is intended to fly autonomously below 10,000 ft. in national airspace, equipped with automatic dependent surveillance-broadcast to detect and avoid cooperative air traffic and onboard radar to detect and track noncooperative traffic, he says.
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The Chaparral unmanned cargo aircraft has hybrid-electric propulsion: battery-powered rotors for vertical flight and a gasoline-powered propeller for cruise. Credit: Elroy Air

Subscale model testing has been conducted under FAA Part 107 rules for small unmanned aircraft systems (UAS), but Elroy will have to be “more creative” for the full-size aircraft, Merrill says. The company plans to work with an FAA UAS Integration Pilot Program (IPP) site in the Western U.S., flying over government land and delivering for real suppliers. “The IPP sites are catalysts,” says Asante.
“We have also made great progress on cargo handling,” Merrill says. The modular cargo pod, which is modeled on a shipping container, is intended to enable greater operational efficiency. “We pack the pod and not the aircraft. The pod is preloaded and staged on the tarmac so the aircraft is not waiting around,” he adds. The aircraft will land, then taxi in to drop off and pick up pods, all autonomously to save time.
The cargo-handling concept is inspired by the warehouse robots used by Amazon, Merrill says. “This provides a very clean delineation between the human and the robot. The human packs the pod and the robot picks it up and transports it,” he notes.
“It’s the safest approach,” says Asante, who has joined the startup from Uber Freight, a service that matches carriers with shippers. Elroy’s operating concept is modeled on Uber Freight’s Powerloop, which provides carriers access to preloaded trailers.
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The modular cargo pod is preloaded and staged on the tarmac. The aircraft autonomously picks up and drops off the pod, reducing turnaround time. Credit: Elroy Air

Elroy sees this also applying to the feeder market, where package carriers such as FedEx and UPS now use single-pilot Cessna Caravans to ferry parcels to shipping hubs. In this model, an aircraft flies to a city to unload, then waits through the day until it is reloaded and ready to fly back to the hub in the evening.
“Our aircraft does not carry as much as a Caravan but is lower-cost and can continue to fly more routes locally through the day, expanding the radius of logistics in that area, and still return to base in the evening,” Merrill says. “No airport or electric-charging infrastructure is needed,” Asante adds.
Eloy is also targeting humanitarian use, for the urgent delivery of relief supplies to remote, disaster-hit regions—reducing transport times and minimizing the risk to human lives. The aircraft is designed to break down a pack into a standard 20-ft. shipping container for transport, Merrill says.
The full-scale prototype is expected to fly “within the next few months,” he says, and envelope expansion testing is planned to extend into early 2020. Elroy plans to certify the aircraft under a combination of Part 23 aircraft and Part 27 rotorcraft airworthiness rules. The goal is to launch the first aerial logistics systems in 2020 with a small number of shippers in the U.S. and overseas.
Backed by Catapult Ventures, Levitate Capital and other technology funds, Elroy is looking at being both a manufacturer, selling aircraft to cargo carriers, and an operator, flying aircraft on behalf of shippers. “In the mature road freight market, there are the carriers and the truck OEMs. In this market, there are neither carriers nor OEMs, so it is an opportunity for us to learn a bit about both,” Asante says.