Saab AB (publ) (SAABB) Earnings Call Transcript & Summary

Welcome to the Annual Gripen Seminar. The purpose of today is to give media and other stakeholders an update and an overview of the Gripen program. As well as a brief market outlook. You'll hear about various aspects of the Gripen system. And this time, the focus will be on a handful of Gripen's key capabilities as a fighter system. . So let's take a look at today's agenda. We're going to start with an overview from Jonas Hjelm, who will talk about Gripen program and give a short market update. We'll then move to a discussion with Danielle Ivana and [indiscernible] on Gripen's key capabilities, and we'll close today with a Q&A session, where we hope to answer as many of your questions as possible. And that's a reminder to please send in your questions at any time throughout the program. You can see that there is a question field below the video window there. And we will take them throughout the program. And again, try to get to as many as we can during the Q&A. And with that, I would like to welcome Jonas Hjelm here.

Thank you, Emily. Thank you. It's great being here. And to all of you, let me also say, very welcome to this annual Gripen seminar unfortunately, we are, as we know, in the middle of a pandemic. So once again, this year, it will be only on online webcasted version. But I really hope to meet some of you also in person when we do the Gripen seminar next year. So -- but we are where we are. So I think we will have a great seminar today.

Terrific. Well, with that, I pass over for your presentation.

Thank you very much. Thank you. So I would try to walk you through a little bit of where we are in the program. Also, as Emily was saying, a short market update. So yes, most of you know, we are quite far into the Gripen program at the moment. That obviously also leads to that we are now entering into the final stages of the aircraft development. That also, in its hand, leads us to that we are constantly ramping up the production. The production, I would mention of the serial aircrafts. So this also leads to that we continue to develop and also to deliver to our existing customers. So we will also, this year, 2021, delivered 2 aircrafts to the Swedish Air Force, serial aircrafts and also 4 aircrafts to the Brazilian Air Force, very important milestones in also showing that we are following the program and that we have a mature and developed product. Very important in this stage is that we are also in the middle of, I would say, to try to achieve or will achieve the military type certificates. This is a very important part in -- for us to be able to deliver on a complete weapon system. The complete weapon system is something that we have promised our customer. And that is also prerequisite if our customers' respective efforts is going to be able to take the system into operational use. So we are in the middle of this, very important verification, declaration and also the continuous development of the tactical systems. All in this for us to be able to obtain the military type certificates. So I would say that we are in well in progress in the development program. And we are following the time lines that we set out together with our customers through those contracts that both the Brazilian Air Force and the Swedish Air Force foot on us. One very important part of doing this is the flight test, not just flying, but that is a crucial part. And just an interesting fact that actually Saab, we, during the spring, passed the 10,000 flight tests. So yes, we are with that, you could say, quite experienced in flying and also testing the system. This is obviously not just the Gripen Eco and the Gripen Foxtrot, but it's all Gripen aircrafts over time. This time, when we entered into the Gripen E program, we, together with our customers, we actually choose a little bit of a different way of conducting the test. Instead of doing it as we did before in different sites, the customer on their own, the industry on their own. We decided that we are going to do it together this time. The customer and the industry, us as a prime, together with our partnering companies, but also to try to do it in multiple sites, both here in Sweden, but also in multiple countries here in Sweden and also in Brazil. And this is happening right now, as we speak, we are doing this and that is, I think, 1 of the key features for us to be successful in this program. So with that, try to go in a little bit into a market overview. I think most of you are well aware of that we I think it is a little bit more than a month ago now, we handed in an offer to Finland, a very, very strong and competitive offer, consisting of 64 Gripen E aircraft, and also 2 globalized, an extensive weapons package and also paired with an industrial participation program that will ensure that Finland will have a security of supply over time. If we look into a number of other countries, Canada, we have provided a very comprehensive response to their request. The requirement is for 88 aircrafts, a quite substantial program that Canada is running. Colombia, we have also submitted proposal on their request for 15 new aircraft, Gripen Echo Foxtrot, and that combined with an extensive technology transfer package. India, very important, big potential customer for us. We have responded to them and to the Indian Air Force with over 100 aircrafts, and we are absolutely convinced that our total package is something that is a perfect fit for India and for the Indian Air Force. So all in all, to try to summarize these Gripen, Echo and Foxtrot countries, potential customers. I think that what we provide for all of these is an agile aircraft on the technological forefront, a modern fighter that really provides air superiority. So priority to a modern air force in any situation that they can accounter.

Thank you so much, Jonas. You sounded very confident in your last statement regarding air superiority. That to be the case.

Yes, but I'm yes. Well, in this business, you can never be sure of if you're going to win or if you're going to end up runner up in this, but I'm absolutely convinced when it comes to the system. And when it comes to the Gripen's ability, in air superiority and to achieve our superiority because this is something that we have put so much effort in. We know that you need to own the sky. That's for a fact. You need to have an advantage when it comes to information. You need to have technology that supports that. And obviously, you need to also have advanced weapon package that can encounter any opponent you meet up there. And Gripen has -- it has all of that. So that paired with, I would say, are a unique approach to upgradability, but also our continuous development of the system that will ensure that modern air forces around the world that chooses Gripen will have an air superiority fighter, Air Dominance fighter for at least beyond the year of 2016. So absolutely, I am. But honestly, I think we have 2 other participants here today that I think can elaborate even more on the game change that Gripen actually is from an air superiority point of view.

Okay, terrific. We will move on to them, but we will see you again during the Q&A. So we will join you once again, and our audience will have a chance to ask Jonas question. So do remember to send in questions at any time. We will get to those later on. And now we will have the chance to hear much more detail on the Gripen system from 2 experts. I have with me, Daniella and [indiscernible], who I will join now on the sofa. Welcome to you both.

Thank you.

So let me first give an introduction, so we understand the true experts that both of you are here today with us. So first, you, Daniel you are line manager at Gripen e Department of HMI. You've been with Saab for 10 years. And you've worked with software testing and development for various projects that saw before moving to Gripen E platform development as a team leader. You project manage the Avionics platform software for Gripen E. And then you were deputy project manager for the Avionics computer project before changing over to HMI. Great to have you. And moving to UC Hamata you have a long background in Combat Air systems and weapons, working as a fighter pilot and weapons instructor in the Swedish Air Force, including roles at Gripen operational and developmental testing. You were assigned a staff tour as the Swedish representative to the media program office in the U.K., working closely with operational requirements and acceptance. And before joining Saab in 2019, you were the Gripen E requirements manager and also headed air to air missile program capabilities at the Swedish Defense Material administration. And I will add, you also have a total of 2300-plus flying hours on over 20 different aircraft types. You're a true expert as a pilot and your current role is operations adviser at Saab. So welcome to you as well. So let's jump in here into our discussion and get started. Let's start with UC. We were hearing about being air superiority. And of course, being air superior is a very important advantage. Can you give us more insight as to what this actually means and what Gripen can contribute?

Absolutely. Thank you very much also for the kind introduction. So yes, air superiority of BS period is quite an interesting term and it's also quite debatable. So during this seminar, I'll try to -- your we'll try to dissect it a little bit to see it means to us in the Gripen community and how we mechanize it. But let me start with providing you the definition of air power first. And the air power it's the ability to project military force or ministry powers by aerial platforms or some from the air to influence or control a course of events on the ground on the surface or in there as well in the military context. So to be able to achieve or project air power, you need a number of quite specific requirements, the key capabilities. So in our ministry world, those capabilities, among others, include, first of all, effect. So affected by kinetic effect weapons or by suppression and also survivability surviving to operate. You need to have availability and reliability to fight over time. Levels of training, of course, robustness and flexibility. Affordability is also of key, of course. But to do all these, we believe that situation awareness is really, really key. And that is provided by what we in Gripen will call information advantage by the new unique human machine collaboration.

Okay. But can we -- yes, but let's highlight a few areas where Gripen really excels.

Yes. I can try to break down some of those capabilities just a little bit further. So I'll talk about some central expressions in our tactical world. So it's kill chain and leave chain. So kill change the ability to find fixed truck target, engage different targets? And then assess that engagement. And then live chain, which is the ability to avoid, deny deceive and defend against those threats. As I just mentioned before, you do it by providing the information advantage by what the system is built and designed for today and in the future as well, of course.

I think you mentioned a human machine collaboration earlier. And maybe we can talk a little more about that. Daniella, this is sort of your specialty area, I understand. A bit of background first because pilots work mainly with human machine interaction, right, today, HMI. So first, let's get the basic principles of which HMI is.

Yes. Well, the basic purpose of HMI, human machine interaction is to provide pilots with relevant data on time. And from the beginning of human flight pilots had very little information. But with technological growth. We also got the information inflation, which was very fun for the engineers, but probably a nightmare for the pilot. At this point of time, the HMI becomes very crucial for the decision support system of the pilot where we are supposed to go from the individual indicators to more visualized display of information. But with even more growing amount of sensor generated data, we decided that we needed to bring the HMI to a whole new level.

Okay. And that's where the HMC comes in. Yes. So what exactly is HMC and what added value does it bring?

Well, pretty simple, agency is a combination of HMI and tactical systems put together to give relevant information to the pilot by processing the information continuously during the mission and keeping relevant throughout the whole mission.

And so if I turn to you, you see, can you tell me more about that from a pilot's perspective?

Yes. Firstly, absolutely yes. Firstly, I must totally agree with what Daniella was saying, I think because the contested battle environment of today and tomorrow is so rapidly emerging with new threats. So it's absolutely crucial to have that Smartness as a pilot. Those clever and intuitive decision support functions. And so the philosophy of human machine collaboration is what provides the warfighter with exactly that. It's really, really, really key. And I have actually provided some slides for you, so I can break it down just a little bit further to see what it really means and give you a few examples as well. So I'll just give you that slide right now. So as Daniella said, pilots in the early days, they perceived some amount of information. Also already the right products back in 1903, they had some information in their aircraft, probably very little at first. But with the introduction of advanced avionic systems, sensors, weapon systems. The information is just growing and growing all the time. So you need to manage that flow. So in Gripen E, we have introduced comprehension. So it's not just about perception. It's about comprehension. What does actually this information that is being displayed mean and why? And we've already taken it to the next level after that, which is the projection information. So the information that is being displayed what does it mean in the next few steps of the fight. So what does it mean in the near future? So the examples I can give you is, if you sit in your jet in front of a missile engagement, for instance, so the jet will provide you with information of current stages of your probability of Intercept and such, but also what happens in the next few steps if you decide to do a certain maneuver or certain course of action. But also it will give you advice of how to optimize that. Similarly, in terms of survivability, presenting information about the threat levels and how that will change if the hostile target you're looking at is doing a certain action or you doing a certain action and also advising you, what should I do to optimally achieve effect but with survivability always insured.

Okay. Now okay. During a mission, let's talk about how this works in reality and how this information is actually presented to the pilot and how the machine and fighter support collaborate with the pilot. Can you talk us a little bit through that?

Yes. Information is presented to the pilot through various displays, and it's a lot of different kinds of information. So I'll show you next slide. So it's presented on head up displays on your helmet mounted displays, if you are wearing or using one. But also on the cockpit displays, which are the main tactical instruments. By symbols, numbers, figures, colors, all kinds of information, by noise, by voice commands as well. In the Gripen E, we've introduced, if you compare it to many -- to the Gripen C, D and other previous versions, wide area wide area display, which is a big 16x 9-inch wide area display for the pilot. So provides you with excellent overall situation awareness in all aspects, regardless of what you do. Fully customizable and controllable as well by different means by touch, by controls and buttons and so on.

So Daniella, if we talk a little further about the design, what did you have in mind when working with the design?

Well, as José just said, the big change in Gripen's cockpit is the introduction of a wide area display. And defining decisions here were to make it as flexible as possible. And the main goal was to spoil the pilots a little bit here. So we made it fully customizable, which means that pilots can choose where to see the information, when to see it and what to see. So for example, if you think about your laptop desktop, if you arrange the items on the desktop and you find them easily afterwards when you need something but if we would let us say -- you see, decide on the -- where your items are on desktop, then we introduce a learning curve into the decision-making that you have to do. So by making wider display as customizable as possible, we are also bringing down decreasing the mental workload of the pilots and decision-making is easier.

How does that sound to you?

Yes, great, it's really nice. Depending on your mission and the phases for mission, you can just alter your settings and your presentation modes just by a bottom press -- according to your own preferences and favorite settings. It's really great, yes.

So based on what we've been discussing, it seems the pilot would definitely need to be very well educated and well trained on such a complex system. How do we prepare the pilot? Or how is the pilot preparing themselves for this work?

Saab already has a lot of simulator abilities for training the pilots. And with the software possibilities, never-ending possibilities, we are also now working on a new simulator ability for pilot training, which is based on VR headset technology. Here, we mix a real Gripen E cockpit with a computer generated surroundings.

And I believe we have a short clip that demonstrates this. So let's take a look then. [Presentation]

So UC, what do you think when you see that?

Yes, I think it's great. It has a tremendous potential. I can see benefits not only for Air Crew training. I can see great benefits for other branches such as technical training, mechanical training and all the other branches as well. So I think it's -- potentially is absolutely there. So it's just our imagination is setting the limits, I think. May I follow-up a little bit on the last discussion just I have actually a slide on wide area display for you so your benefit. So I can just explain a little bit more how that actually works. So for -- on this slide, you will see an example of an edge ground targeting type of scenario, which -- where the pilot has sales his or her preference. So in the background, you will always see the digital map and all the symbols, regardless of where the information comes from, are presented as 1 fusionized data track and you can then see if you want to hear that, that -- what belongs to that track and what information is fed behind on the lower right corner there, you can see on this specific slide, setting of a presentation of a target area overlaid by targeting pot image on the same. And on the -- if you look at towards the left there, you can see just a specific point of interest and then some navigation information in the bottom left corner. So the wider display, very clear, given you have a wonderful situation awareness. And use the concept with high level commands to control it through the human machine collaboration. So instead of controlling all the parameters setting to do a certain task, for instance, if you'd like to detect a lower observable, low flying object at range, you just assigned the task to the system, who then optimizes all the settings for you. So also using functions as like auto sorting and auto selection of targets. So really lowering the mental workload of the pilot.

Thank you. Now we heard Jonas say in his presentation that 1 key to winning future combat is to be technologically relevant. Daniella, can you talk about some of the thinking behind Gripen E that allows for its adaptability?

Yes. Well, if I see myself as a producer of a Gripen system, and UC as a user, then my job is to make his job easier. And by having this as a ground decision-making. We thought of that we need to make a tactical support system easier to update. And this is made possible through the avionics platform software that is making -- separating the flight critical software from the mission functions. By doing so, we can update tactical system software within days or even make bigger changes like adding a functionality to tactical systems within days.

And how important this is adaptability from a user perspective you say?

Oh, yes. Very, very important. So as a warfighter to be up in the air operating day 1 to learn what is happening to take those lessons learned and lessons identified back into quadrant and then analyzing the data tweaking adapting my tactical missions, my tactical systems. So I can then perform better than my adverse day 2. So absolutely key, really, really, really important. And so the warfare really needs to be ensured that the tactical systems will perform according to expectations. I'll give you an example here as well, it could be, say, transition phase from a peace time scenario into maybe a more low-intensity gray zone phase where you start harvesting that real mission data that's when you really want to be quick and take that data away and own the mission loop to make those very rapid adaptation. So with Gripen, you get full ownership of the tactical mission loop, which is really key.

Now as weapons are becoming more and more sophisticated and technologically advanced, what capabilities does Gripen E have against emerging advanced threats, UC?

Yes, we talked about the situation awareness or the information advantage already, of course, very -- but this kind of point one. Also, we need to be considering survivability, survive in fight over time. The Gripen is equipped with every jet has its own internal electronic warfare system, which can do both offensive and defensive tasks, suppression countermeasures to ensure survivability. Every Gripen can also play a role in an electronic attack mission regardless of the original main objective of the mission. We must consider also lethality. So weapons carrying off weapons, which is can sound aggressive, but the weapons are really the thing that create that threshold and give us that creates that determine that defense nations need to to defend the nation to keep people on society safe against the potential hostile act. So with weapons, I mentioned 2 main weapons, which we are focusing on currently, which is, of course, metal it's the bond visual range air to air missile system in use in the Air Force since April 2016 already. So we know quite well. It's a step change in kinematic capability, especially in constrained or contest environment. The other 1 is long-range cruise missile called Torus or CAP 350, which provides defense forces of very efficient survivable strategic attack capability. Those -- these capabilities, combined with the flexibility of using offensive or defensive means simultaneousness to target, acquire and suppress at the same time. And in collaboration within the tactical air unit. So that's normally 2 to 8 Gripen's. Who can do collaborative tactics spread out, where 1 can be passive, that he can be active. That is what provides you with the edge, the combat edge.

And also regarding kind of the collaboration aspect of things. Daniella, what does it mean to be networked in terms of?

Well, to make this collaboration in technical units possible. Gripen is fully connected with the whole unit. And the members of the units can be in air or land or surface and all of them are sharing information. That they have with each other, which also makes Gripen fully interoperable with, for example, NATO. By doing this, all members are putting a bit of a puzzle in information fusion system that is actually a foundation of the HMC.

May I also add in -- when we talk about networking, the ability to use network weapons, which we use. So sending and receiving information to and from weapons in flight to ensure that they are going actually against the right target, not the wrong one to see what stages they are and also tactical smart functions such as network enabled engagement, where you can find a favorable missile launch positions to optimize your probability of intercept, but with full survivability insured.

So that's network enabled engagement.

That's correct. Yes.

Now you see Gripen is not a stealth aircraft. So how can it operate in increasingly contested environments?

Yes. Emily, that's a very good question. We get it quite a lot. And first of all, when we've designed Gripen to survive in the contest environment. It's been an informed and active choice from a deliberate choice to pursue -- to not pursue stealth because stealth has been in the hide for a number of years, and maybe still is. It's a capability of -- yes, which is diminishing. And that -- the reason to that is because of low-band radar sensors, which are already being fielded and operational in the contest environment. So we build survivability by means of electronic warfare and electronic attack instead collaboratively in the Gripen tactical unit, but also autonomously. So we don't have to rely on stealth aircraft or an airframe, which also is quite expensive and labor some to maintain.

Yes. Well, it's very important, as you said before, to remember that Gripen's EW system is part -- a continuous part of Gripen's intelligence. This is because it is a very important part of pilots decision-making system because well, it's supposed to make your opponent make -- take poor decisions while engaged. And we are -- we can do this by over flooding the opponent with information, for example, using advanced jamming functions, including smart noise or false targets.

Okay. Thank you. Now we're going to close this session shortly. We have heard how Gripen can meet the most advanced threats through information advantage, technological relevance and advanced weapons. UC, are there any other capabilities that you would like to highlight before we close here?

Yes, I think we talked about a number of things that actually affects viability and things like that. But to be able to do that not only day 1 or day 2, but over time, the capability of availability and sustainment -- sustainability is really important. And we've built Gripen designed the first day with high availability, maintainability and logistical supportability in mind. So that it can be easily maintained and turnaround in a remote forward operating base easily by a small team, maybe 1 technician, 4 or 5 mechanics with fairly moderate training levels. So that's what provides us with the kind of the durability and longevity to fight over time.

Thank you. Daniella, any final words?

Well, I would just like to say that with Gripen E, we are really taking the generational issue off the table. Gripen E is built for the -- to meet the future of future world.

Yes. Great. So now let's move on to our Q&A session, and I'm going to invite Jonas Hjelm back to join us here here.

Thank you.

You can join us here on the sofa. And I'm just going to remind everyone that you can continue to send in questions. We're getting lots in from our online audience. So I'm sure this will be a very interesting discussion. Let me see what we have here. So we're starting with a question from Pent Pertura from Svet Wings Airshow. And this is a question for either Jonas or UC, it seems. What are the benefits accomplished in joint test flights with the customers compared to the old way of separate testing?

If I start?

Yes, please.

Yes. Well, I think 1 of the important part is that the speeds up the program. Instead of us doing tests first, and then we hand over to the customers who does not exactly the same but similar tests. So that's a big advantage. We save time. And obviously, time is money. So without jeopardizing actually test results.

I think with the evolution of advanced simulators and rigs. Also, it would be wonderful if you can just do a developmental testing in rigs to simulate and and then use flight tests as a method of verification. It's not quite there yet, but that's what we're 1 aiming for to speed up the process as much as we can.

Okay. Question for Jonas from Aslan Kan from the QUVA Group. Do you still see a viable market for the Gripen maritime, even though India is looking elsewhere for their needs. Does the Gripen maritime not defeat the purpose of the Gripen being a low-cost but relatively capable aircraft?

Well, we have always said that we conducted the basic studies. Looking into the possibilities to actually convert the Gripen Echo into a maritime version, and we came up with a conclusion that it is doable to do that. But we also took the decision that we need a partner, i.e., a customer that actually is willing together with us to invest and to take on to do this. And so far, we don't have that customer. So for maritime is still viable for the future, but it requires a customer. We won't do it on our own.

Okay. Daniella, there's a question that's coming from a Facebook viewer. You mentioned that it is possible with rapid updates of tactical functions, how fast are we talking about?

Well, it, of course, depends on the change. If we are talking about adding new information if we are learning on day 1 and executing on so that would be information database update. This may be several hours a day. But if we want to add a new ability to the tactical system by adding hardware or external load to the aircraft than maybe a week or yes.

Okay. Jonas, a question from Richard Thomas from Air International. What do you think were the main or contributing factors that meant Saab was unable to succeed with its Gripen offering for Croatia's fighter replacement program?

Well, let me start by saying, obviously, we all know that these processes are quite complex, and we obviously respect the creation every other country make whatever decision they make. But I think that we have said all the time that for us, it's difficult to compete with used aircraft. And if I understand correctly, they have chosen to go with 12 used raffles from France. It's difficult for us since we are providing new aircrafts, we can never really be competitive with used aircraft. So I think that's 1 of the main reasons. Unfortunate, but that's 1 of the main reasons.

Another question for Jonas from Chen Cann from Aviation Wheat Network. How is the negotiation progress in the Philippines? Or is there a study as to how much cheaper to operate Gripen is compared to an F-16?

Well, we are not in a negotiation process ongoing with the Philippines. We have an offer into the Philippine airports, and they are evaluating that, and we have a dialogue with them. But we are not in the process of negotiating. So on the later part of the question, I'm not really sure I'm going to be able to answer that. But we have a valid offer, and we have a constant communication with the Philippines.

A question for UC from Tony Osborn, Aviation Week. Can you clarify how many Gripen Es are now flying in support of flight testing? Does that include the Gripen demo aircraft? Can you say what weapons have been released and/or fired so far?

Yes. I'll try and give you the latest actor. I think Jonas can maybe help me, but I think it's in the flight test program today in collaboration with Brazil and the Swedish Air Force, the Swedish defense material administration. We have -- is it 7 or 8 in operation today. And that's excluding the demo, which was more an avionics test bed for -- well, avionics and engine modifications and some airframe modifications. And what was the second -- last part of the question?

It was -- can you say what weapons have been released?

Yes. We've done hardware integration of Iris T and metro and commenced with some other munitions. To date, we have just performed the second launch pain of Iris T firing just a few weeks ago. And looking forward to making the first meter firing within the next few months, hopefully.

Question for Jonas from Jo Tiki from Top Sector and Aero Sector. If Colombia adopts the Gripen, do you believe that that Saab Brazil and Embraer can also contribute to this operation as partners?

Yes, I'm absolutely convinced when Colombia Chooses Gripen as their next fighter, it will be a broad industrial participation and collaboration. And I think both Saab in Brazil, our other partner companies like Embraer, AEL and so on, they will be a vital part in collaborating with the Colombian industry, but also, obviously, they are part of the global supply chain. So they will be a part of such a program, definitely. But then it's also fair to say that every country, and that goes, obviously, for Colombia as well, they have their own view how they want to set up their national industry and what kind of security of supply they want to have in country. So that is always something that's going to be tailor-made forever in each country and every in each customer.

Okay. Question from Thomas coming in from Facebook. There are possible sales to countries that require an operational aircraft immediately. So the question is how fast can Saab and associates meet that demand? And I guess that's for Jonas.

Yes. Well, if we talk about the current operational fighter the Gripen Charlie delta, we have in recent proposals, we have promised 18 to 24 months for initial operation. And I think that is still valid. So in -- it might sound if you are -- if you wait for a new car for 18 to 24 months, you might think it's a long time. But for fighter, it's actually quite just-in-time delivery. Obviously, if you are looking into the Gripen Echo Foxtrot, that is still under testing, verification development, the lead times will be a little bit longer, definitely. But Charlie Deltas, you can have between 18 to 24 months.

A question come in for Daniella on -- from Facebook. Follow-up question to the upgrade question. How are you able to certify the airworthiness of these upgrades in such a short time frame?

Well, because we are separating the flight critical software. We are not making changes on flight critical software. It's on its own side of the wall. We are only adding functionality on the tactical system, which is not flight critical. And hence, it's not a same airworthiness issue there.

We are already doing it today in the flight test program, where we have been able to launch iterations of software also linked to hardware. Within only very small amounts of time of days or weeks to test and to fly from kind of a concept phase into assessment demo and into the jet. So it's really it's working today already.

If I also my answer is as I think this is 1 of our key points actually with [indiscernible] and the architecture that to really provide what we were talking about earlier, the true air superiority and to make best use of the technology in the operational environment that will constantly change. This is a prerequisite. This is what makes it possible to stay relevant and to adapt with a fast pace. So yes, and as José is saying, we are doing it today.

A question for UC from Tom Hamlin. Will Gripen E and General Electric's F-414 and turbofan, be able to provide enough electricity for future direct energy weapons and other electronic systems?

Yes. When you develop systems, you always take into account kind of a future proof, let me say, space. It's about technology, it's about computer software, hardware engines and all kinds of aspects when you develop a fighter jet or any other -- in any fighter system. So you must take into account the potential or possibility of future upgrades, not only for like 1 or 2 or 3 years ago, but also for longer. So absolutely, that question is undoubtedly, yes or the answer? Yes.

Yes. Question for Jonas comes from Tim Martin Sheppard Media. Are reports accurate that the Brazilian Air Force are considering a new grip in order to expand their fleet beyond the 36 on order. If so, when might negotiations finish and an official announcement arrive?

Well, hopefully, will arrive soon. No, jokes aside, this is media something that we have ready media as well. We know that Brazil stated long time ago that they have a long operational or long time operational need of more aircraft than the first 36 they bought, but they haven't outlined an official communication or in any negotiations when that can happen. So obviously, I think it is fair to say that we need to start to show you that we deliver on our first contract that the Brazilian Air Force gets operational aircraft, then I think it is more likely that we will start discussion on batch 2 or more aircrafts for the future. But as we say -- as I say, this is something that has been told by Brazilian officials many years ago, that they have a greater operational need than the current 36 aircraft they have purchased from us.

Okay. Question come in from a viewer on Facebook. What happens to the Gripen C, D in the future? Jonas?

Well, it is a fantastic platform operational as of today. Obviously, as all current platform, it needs to be upgraded. And I think the very positive decision from the Swedish Parliament late last year saying that they will continue to operate equipment C,Ds in the Swedish Air Force for additional year beyond 2030. That also gives the possibilities for all the Gripen C,D users that are around the world today, like Czech Republic, Hungary, South Africa, Thailand and so on to continue to fly and operate this platform. But it also leads to that we are in discussions on how we are going to upgrade the aircraft for the Gripen C, Ds to stay relevant over time. So that is a discussion that is ongoing at the moment. But it will be operational long after 2030, in my opinion.

Okay. A question from Ravinder on Facebook for Jonas or UC. How is your operating cost -- how is your operating cost better than other fourth generation fighters like Rafale F-16, 15. F-15, F-18 and listen number, including euro typhoon. So looking at operating costs. Well, compared to other fourth generation fighters.

That's a massive question. If I start, can take a little bit. So I think that you can look on this from different angles. First of all, Gripen was designed to be easy to maintain, easy to operate, quick turnaround times. It was designed for an Air Force that was even if the Swedish Air Force was quite big, still limit amount of funds to support an advanced fighter system. So that has been already from the design that it should be an aircraft that is less costly per hour. So that's 1 perspective. The other perspective is that a single engine aircraft will always be at least half as expensive as the twin aircraft factor.

Yes. I can add it. That's exactly right. And in our work, when we look at availability and maintainability. That's 1 of the important capabilities, as we heard before mentioned. We've done a comprehensive analysis of data from the past, Gripen C, D transferred into Gripen E by design. We've looked at OpenSource figures about meantime between failure, meantime to repair. And we've compared and seen what are kind of the capabilities? What are the deciding factors that created availability. And we've come up with really favorable numbers for our platform. It's exactly what -- by design, the inherent design, how we built it and to the purpose, we built it for.

Thank you. Okay. Another questions come in. This 1 for Daniella from Nolan Kili from Top Aces. Regarding HMI, with the growing needs for more and more data being collected by weapon systems. What steps will Saab take to not overload the pilot going forward?

Yes. But we are using the onboard algorithms to do the processing so that pilot only gets the information he really needs. By doing -- by collecting the information from all members in tactical units, and they are all sharing the information fusion system. We are using all the HMI pilots are used to to introduce even the new information, like you said before, by colors, by symbols, but everything is already known to the pilot.

I think it's a philosophy of not telling the system anymore, like conventional HMI designs to how to do the job. Now it's to just do it. And then the system will decide, okay, this is how I'm going to do it. And that's what really gives you like the warmer feeling as a pilot, maintain your situation.

A question for Jonas has come in from Nelson during from defense and at Brazil. When will the Swedish Swedish Air Force introduced Gripen 39E?

Well, that's something for the Swedish Air Force to actually answer. I'm a little bit cautious there because 1 thing is when we deliver an aircraft, to the Swedish customer, then they obviously has a decision when they start to train pilots, they start to train technicians. And then they find a suitable time when it's operational need and so on and when it's suitable for them to introduce. So it's unfortunately impossible for me to say exactly when it will be operational in the Swedish Air Force.

Okay. A question for Daniella or UC from Andrew Ferrington from Ara. You have mentioned before that experimental and simulation testing is not yet at the stage that flight tests can be only used as validation or be used only validation. What improvements do you think are required for this to happen?

I think that's a good question. I think it's -- we'd like to speed up the process as much as we can. And personally, I don't think that we will maybe ever be there that we can use flight test just to in the very kind of end bit off the development cycle of the systems engineering cycle. I think we need to always do a little bit more than just verification. But if you can just minimize that little development or testing, that would be really great. I think it's about how you build systems, the fidelity of simulators and rigs.

Here, again, we are talking about maybe 2 different sites. We have the flight critical system that needs to be tested on the code level on every -- each row of the code. And then we build up for the functions and for the system functions in the simulators. And later on, we go up to flight tests. Whereas maybe we could be a little bit more flexible, how we are thinking on the tactical side of the world, Gripen world.

And also, to be honest, it's not only for us as an aircraft design or to decide. There are standardized regulations and rules for airworthiness. Which require us to do a certain bit of testing to really validate the awareness of our platform. So we need to apply to those rules as well.

Question for Jonas from Richard, a viewer on Facebook. How long does saw plan to maintain the production line and capability for new production C,D and when will sub transition to full E, F production?

We will continue, and we have the capability to continue to have the Gripen C, D line open for many more years. The thing is that we try to -- we don't have staff that only works with Gripen C, D and the staff that only works with Gripen E, F. So we try to educate and train our crews to be able to do both of them, which obviously will extend the time where we actually can produce the Gripen C, Ds. So I don't have any specific here when this will happen. But obviously, everything good has an end, but we are not there yet.

Another question from Nolan Keli from Top Aces for UC. Does Saab have a preferred aircraft training platform for fighter lead in training? How does Saab smooth out the learning jump from trainer to the fighter?

Yes. That's -- there's 2 perspectives of this. First of all, our industrial perspective, what we believe. But then it's, as we talked about capability, it's really the operators, the Air Force is that decide how they do training and how they build the capability. But yes, I think with the youngsters out there today who are very -- kind of well adverse with the modern technology of synthetic environment. I think the LEAP from day 1 to fly basic training into more advanced system aircraft platform is probably shorten when I started flying back in 25 years ago. So we provide, as you know, maybe the T-7 in collaboration with our American partner. It's an advanced trainer. But I think to talk about how to do lead in training, follow-on training, operational training. I think that's probably more relevant to discuss with an Air Force rather than Saab.

Okay. Question for Jonas from Karisa on Facebook. Will Saab make a drone version of Gripen, like a Loyal Wingman program?

Honestly, I don't know. I think that we have the capabilities to make Gripen option demand. We haven't done it yet, but maybe in the future. I think that we are always looking into being on the forefront when it comes to autonomy to unmanned things, how we can command and control, can work together. How the human manned Facebook. So absolutely, this is something that we are looking into all the time. We have no clear plans as of today. When a year when we're going to fly an optional demand Gripen, but it is interesting because I think that tomorrow's battlefield will require a mix of manned versus unmanned platforms and that they can work together in a controlled airspace. And I think that is 1 of the key challenges for a company like Saab to continue to investigate.

We still have a few more questions coming in here for UC now from Jim Allen from Independent Aviation Media. With Canada second guessing the use of F-35 as a replacement to their CF-18s. What would you say puts the Gripen E above and beyond Boeing's fighter to make the royal Canadian Air Force choose your airfare.

That can be -- I can probably talk about that for hours, but I'll try to give you a very short answer. And it's about why do we believe that Gripen is the platform that provides and operate the best capabilities. And we believe, by the whole kind of the holistic design how we've designed it, with the powerful centers, advanced data fusion, strong electronic warfare, electronic capabilities and the most advanced weapons, those capabilities with mix with the kind of user affordability, availability and sustainability. I think that's what differentiates us from other platforms. Any additions anyone?

A question for Jonas from Mikkel Holmstrom from Dogas New Hepto. When will you deliver the first Gripen E cereal plan to the Swedish Defense Material Administration?

We will deliver 2 aircraft this year, 2021, to the F&B.

F&B. Okay. Another question for us from Nelson during from Brazil. Can you elaborate on the tests and performance you have done with IRST?

Yes. Well, I can try a little bit. I'm not fully aware of the test program, of course. But we've done -- because it's developed to do a passive acquisition of targets in certain scenarios, both in the air to air domain, but also maybe in the ground domain depending on what your requirements are. But we've done a lot of testing, and we've done verification testing in Finland toward -- directed towards the Finnish requirements in that specific campaign. So I would say, yes, we've done a lot of testing, and we know the capabilities quite well. And now with follow-on integration and trimming and the kind of buildup avionics and tactical system buildup, we will, of course, continue with tests as much as we can.

And I think we have our last question here for today, which I will ask Jonas. Facebook Viewer, Johnny Asks, is the Saab expand ASR as a radar already available as an upgrade for the Gripen C,D Standard [indiscernible].

No, it's not -- you can't order it today and get the delivery tomorrow, but it is definitely part of the thinking, as I was talking about before, the upgrade of the Chile deltas for the future. So that is definitely something that can be be on the customers' wish list for upgrades. So absolutely.

Okay. Well, with that, I think we're going to close the Q&A session and our event today. Thank you all so much for participating. Very interesting discussion. And we would like to thank all of our viewers who have participated. So actively here, we want to remind you that this entire presentation as well as the presentation materials will be available on saab.com. So with that, thank you so much for joining us, and have a great rest of the day.

Thank you.

Thank you.