Saab expects U.S. Air Force T-7A Red Hawk Milestone C to lift production as Indiana factory begins a multiyear financial recovery

By Martin Chomsky (Defence Industry Europe)

Air |
Saab expects U.S. Air Force T-7A Red Hawk Milestone C to lift production as Indiana factory begins a multiyear financial recovery

Photo: U.S. Air Force.

Saab expects production of the T-7A Red Hawk trainer to accelerate after the U.S. Air Force reached Milestone C. The Swedish defence group warned that its Indiana operation will still need several years to deliver stronger financial results.

The milestone allows the U.S. government to begin contracting Boeing for batches of aircraft, Chief Executive Micael Johansson said. Saab had already started work on its own batches under contracts placed by Boeing.

“So now the pace needs to increase going forward,” Johansson said during Saab’s second-quarter 2026 earnings call. He said it would take several more quarters and “a couple of years” before the business returned to what he described as good numbers.

Saab manufactures its share of the aircraft at its facility in West Lafayette, Indiana. The site continues to suffer from underabsorption while production volumes and delivery rates remain below the level needed for efficient operations.

Johansson said the U.S. Air Force was also beginning to operate the aircraft. That transition places greater emphasis on raising production across the Boeing and Saab industrial structure.

The immediate challenge for Saab is to increase throughput at West Lafayette without expecting a rapid financial turnaround. Johansson did not provide production targets, delivery volumes or a date for reaching full utilisation.

The programme is still making a negative contribution to Saab’s Aeronautics business, according to comments made during the call. That pressure is expected to continue until the company achieves greater production scale at the facility.

Despite the extended ramp-up, Johansson presented the T-7 as a long-term industrial opportunity. “Eventually, this will be an excellent franchise program over many years,” he said.