Saab suggests T-7A Milestone C in late-2022

Swedish defence and aerospace provider Saab has said the T-7A programme, which together with Boeing will deliver a new jet training aircraft to the US Air Force (USAF), could reach Milestone C in late-2022 ahead of moving to a more stable low-rate initial production (LRIP) in 2023.

The programme was widely reported in June to purportedly be over a year behind schedule and saw a dip in FY2022 funding requests from US$206m to US$189m. The aircraft is intended to replace the T-38 Talon trainer currently in USAF service.

T-7A Red Hawk
The T-7A, formerly known as the T-X, is a key programme for the USAF as it looks to replace the existing T-38 Talon trainer. Boeing

Micael Johansson, CEO at Saab, speaking during a July 21 briefing on the company’s Q2 performance stated that there was no new timescale being worked towards with Boeing on the programme.

“There have been discussions with the USAF as you know and we will aim to meet this original schedule and potentially meeting a Milestone C in late-2022 rather than what was being communicated, later in 2023,” Johansson said.

Continuing, Johansson said that the programme will move into a “more stable low-rate [initial production]” in 2023 with full-rate production following in “a couple of years” after that.

“So, sort of 2024 to 2025, we should be up at the sort of pace that is connected to the now existing framework contract of roughly 400 aircraft to the USAF,” Johansson detailed.

Regarding the company’s performance in Q2 2021, it was outlined that the sales performance of the Aeronautics business area had improved 8% compared to the same period the previous year due in part to the “high activity level” of the Gripen E/F programme for both Sweden and Brazil. However, year-on-year amortisation costs of SEK129m (US$14.8m) were reported from the GlobalEye programme.

Overall Aerospace business area estimated earnings before tax (EBIT) was calculated as 6.7%, down from the 8.4% reported in Q2 2020, due to project related adjustments related to the COVID-19 pandemic in Q3 2020 and the “ramp up” of the T-7A programme.

In terms of key orders in Q2, Saab referred to the Future Development and Support contract for the Swedish Gripen C/D and the extension of the Helikopter 15 support programme with the Swedish Defence Materiel Administration (FMV).

Operational cash flow for Q2 was SEK3.1bn (US$357m) due to large milestone payments received in the quarter, with company officials outlining that the second half of the year could have “a weaker, maybe even slightly negative cash flow.”

By Richard Thomas