Global markets have been turbulent and the pinch has been felt across all industries. How will this affect the future of the aircraft industry? How will it affect Saab?

As with many global markets, the defence and security sector is faced with difficult market conditions and we foresee that they will remain at least throughout the rest of 2011. But the recent turbulence on the financial markets in the US and in Europe will not affect our scheduled investments and recruitments. However, despite declining defence budgets globally, Saab remains well positioned, as one of our core strengths is to ensure the delivery of affordable, high quality products within budget and on time.

Over the summer, the company announced that it maintains its fiscal year 2011 financial guidance but estimates a slight full year decline compared to 2010. What is the expected revenue for this year and what have been the key contributing factors?

We are not able to provide any detailed outlook for revenues or suchlike. Key issues for us are the market conditions – which remain challenging – and budget priorities.

Saab is one of the leading names within the jet industry. Who are your direct competitors and how do they compare?

Currently, very few nations in the world are capable of developing and producing the latest generation supersonic fighter aircraft and Sweden is one of those nations.

Saab AB is one of the world’s leading aerospace companies in the design, production and manufacture of aircraft and has a long and proud history with more than 70 years at the leading edge of military aviation. More than 4,000 aircraft have rolled off Saab’s production line over the years. Fighter aircraft, as well as civilian aircraft like the successful Saab 340 and Saab 2000, have been developed and produced since the end of the 1940s. The skills needed throughout the design, implementation and production are extremely high-tech,
and Saab’s engineers are some of the finest in the world.

There are several competitors in this market sector from within Europe, the US and also from the East, and what we can say is that the competitive environment is fierce. There is never one competition that is really the same. However some principles such as a need for affordability in terms of acquisition and through life support costs as well as the operational effectiveness remain two of the most important factors.

Gripen is currently in service within Sweden, South Africa, Hungary, Czech Republic, Thailand and the UK Empire Test Pilots’ School, and is being evaluated by several other countries.

Saab’s acquisition of Sensis Corporation has just been completed. How will the merger benefit the company?

The main reason behind the acquisition is that Sensis strengthens our offer within radar, sensors and Air Traffic Management solutions as well as establishing a stronger market presence globally, especially in the US.

The acquisition is a further step in our long-term strategic plan for growth in the North American market and provides a strong growth platform from which we can build on the combined installed base and excellent skills in systems engineering, design and integration.

We also believe that the coupling of Sensis’ and Saab’s broad portfolios of advanced Air Traffic Management solutions creates comprehensive and world-leading solutions in the market place.

Tell us about the Gripen’s position within the industry. Which aircraft are its main competitors and why? What sets it apart in your opinion?

There are a lot of reasons why Gripen stands out from the competition. Gripen was designed with affordability in mind. The key requirements during the initial development were to minimise cost increases, both in terms of operational running costs and the cost of development, while at the same time being able to adapt to all future operational requirements. A simple strategy of buying the most technologically advanced equipment available and off the shelf was adopted with the result being that Gripen has the best price/performance ratio and the lowest operating cost of any fighter currently in service.

Gripen has a very high operational performance. This basically means its ability to perform multi-role missions efficiently and effectively is second to none. This is achieved by ensuring that all the sensors on board, such as data-link, multi-mode radar, reconnaissance pods and so on are ‘fused’ to give the pilot total situational awareness of the scenario they enter, ensuring that they can perform the mission successfully. In addition, a very high reliability rate means that, the one Gripen in a combat zone can perform up to three times more operations than its closest competitor. This means more time in the air, rather than on the ground being repaired.

One other unique selling point of the Gripen is the fact that we are flexible in terms of how we deliver the contract, and we listen closely to what the customer both wants and needs. In addition to the regular direct sale, financed perhaps via a commercial bank or a state’s own financing, it is possible to deliver Gripen capability through “Power by the Hour” (PBH), as we do with the UK Empire Test Pilots’ School, or through all-inclusive leasing schemes. The benefits of both the PBH and lease schemes are that the customer’s risk is minimised and need to find an acquisition budget is reduced – and therefore the overall effect on national economy is minimised. An added benefit has been the provision of Industrial Cooperation, otherwise known as Offset, where we provide industrial benefits to our customers, to offset the acquisition. This Offset includes, for example, the transfer of technology, or transfer of production or design elements of Gripen.

The Swedish government in July approved $163m in state funding for further development and maintenance work on the Gripen. What are the key areas these funds will go towards? Where else does funding come from?

The funding approved by the Swedish Defence Material Administration (FMV) in July included:

• Maintenance of the aircraft as they are today. Half of the funding is for technical support on a level above what the Swedish Air Force’s own technician’s work on, and the other half is test resources such as simulators and test aircraft;
• Test resources for the future and to ensure that technical competence is available in the future. It could be new simulators or competence development;
• Studies on what resources the Armed Forces want the present aircraft fleet to have in
the future;
• Studies on what abilities that could be important on a longer term.

Saab has been striving to increase the Gripen’s exposure to international markets. What is the company doing to achieve maximum publicity?

Our strategy for success is to be visible in our markets, close to our customers; mostly this is achieved through establishing local offices. Achieving maximum publicity is a matter of being visible in the market including giving presentations, exhibitions and air shows, and that is something that we put a lot of focus on. We prefer to be visible to the customer in those markets we prioritise through different activities, such as trade shows.

Are there any technology breakthroughs that Saab is currently working on or developing to further its standing within the aircraft industry?

Much is happening within Saab at the moment. Advanced technology and engineering have been, and still are, the keys to our success. We invest roughly 20 percent of our revenue in research and development, in Sweden and in several other countries. For example we’ve established technology centres in both India and Brazil in the past few months.

Some of our most research-intense areas at the moment are Unmanned Aerial Vehicles (UAVs), such as Neuron and our own rotary wing Skeldar. We’re also currently working on Remotely Operated Towers (an area where Sensis will be a great asset) and we are also proud of being part of SESAR (Single European Sky Air Traffic Management Research) and Clean Sky.

We know that we’re facing an increased part of self-funded R&D. The Swedish Armed Forces and our other customers need and want the best products and solutions, irrespective of origin, in a timely manner. That’s why an increasing part of R&D will be self-funded for the defence industry, and it’s a global trend.