Saab expects to be negatively impacted by its role in the Boeing T-7A advanced jet trainer programme for the “next couple of years” before seeing its involvement rewarded, the Swedish company says.
“We still have start-up costs and under-absorption because of low-rate production on the T-7,” Saab chief executive Micael Johansson says, referring to work at the company’s dedicated facility in West Lafayette, Indiana.
Saab says an otherwise strong performance by its Aeronautics business unit between July and September this year was “partly offset” by its T-7-related activities.
“That will correct itself over time, but we will be burdened by that a bit during the next couple of years before we get back to some really good numbers,” Johansson said during the company’s third-quarter results call on 22 October.
Noting that it is currently on contract to produce around 35 aft fuselages for the US Air Force (USAF) programme, he says: “We still have start-up issues in the flow, for us and suppliers. We need more flow in the factory.”
Most recently, Saab in late 2023 received a $101 million contract to produce an undisclosed number of aft fuselages for the Red Hawk at its West Lafayette site.
“I’m confident in the capabilities we have in the factory,” Johansson says. “It’s not technical problems: it’s stop and start in the production, and we need to get the flow going.”
Despite the current challenges, Johansson says the T-7 will become “a franchise programme over many years”. The USAF plans to acquire at least 351 examples to replace its Northrop T-38C fleet, with Boeing also eyeing numerous future export opportunities.
Boeing – which assembles the Red Hawk in St Louis, Missouri – on 11 October disclosed that it had incurred a $900 million third-quarter charge against the programme. It attributes the penalty to “higher estimated costs on production contracts in 2026 and beyond”.
