CAE Inc. and Leonardo S.p.A. announced an expanded collaboration agreement on July 22, 2026, at the Farnborough International Airshow to develop a next-generation technology roadmap for the M-346 Integrated Training System (ITS). The partnership will integrate Live, Virtual, and Constructive (LVC) environments to prepare military aviators for increasingly autonomous and artificial intelligence-enabled battlespaces.

The agreement builds on the existing joint operation of the International Flight Training School (IFTS) located in Decimomannu, Sardinia, Italy. According to the joint press release, the companies will focus on advancing the M-346 Block 20 system features and expanding Live Synthetic Integration (LSI) capabilities to meet evolving tactical training requirements for global air forces.

Advancing the M-346 Integrated Training System

The technology roadmap outlined by CAE and Leonardo targets the integration of advanced simulation with live flight operations. As military aviation shifts toward next-generation air operations, the training syllabus must adapt to environments where pilots manage complex, automated mission systems rather than focusing solely on aircraft handling.

Pascal Grenier, President of CAE Defense & Security, highlighted the operational focus of the expanded partnership in the company’s official statement.

“Our longstanding collaboration with Leonardo and the International Flight Training School (IFTS) stands as the premier example of combining highly sophisticated simulation technologies and live flight training to deliver world-class pilot instruction and operational readiness.”

Grenier added that future battlespaces will place unprecedented demands on pilots, requiring training environments that build judgment, adaptability, and decision-making skills. Stefano Bortoli, Managing Director of Leonardo Aeronautics, noted that the agreement will strengthen the development of highly skilled pilots for current and future operational requirements.

Expanding Global Footprint and Financial Context

The Farnborough announcement follows a series of recent international agreements involving the M-346 platform. On May 26, 2026, ITPS Canada ordered Leonardo M-346 T Block 20 advanced jet trainers. Subsequently, on July 21, 2026, Leonardo signed a procurement contract with PT ESystem Solutions and the Ministry of Defence of the Republic of Indonesia for M-346 F aircraft to fulfill Indonesian Air Force training and combat requirements.

Leonardo also utilized the Farnborough event to highlight its broader defense sector momentum. On July 22, 2026, the manufacturer signed a separate agreement with Lockheed Martin to strengthen maintenance, repair, and overhaul (MRO) services for the C-130J Super Hercules across Europe and the Middle East and North Africa regions.

The press release detailing the CAE partnership also provided an update on Leonardo’s financial standing. The company reported 2025 new orders totaling €23.8 billion, an order backlog of €46.6 billion, and consolidated revenues of €19.5 billion.

AirPro News analysis

We view this expanded CAE and Leonardo partnership as a necessary evolution in military flight training. As sixth-generation fighter programs and collaborative combat aircraft concepts mature, the cognitive load on pilots will shift heavily from basic airmanship to systems management and tactical battle management.

By embedding LVC and LSI technologies directly into the M-346 ITS roadmap, Leonardo and CAE are positioning the platform to remain relevant against emerging clean-sheet trainer designs. The recent string of international orders for both the trainer and fighter variants of the M-346 indicates that the airframe still has significant market runway, provided the synthetic training environment keeps pace with frontline combat systems.

Sources: Leonardo Press Release

Embraer S.A. and Anduril Industries signed a Memorandum of Understanding (MoU) on July 21, 2026, to integrate the pallet-launched Barracuda-500M stand-off cruise missile into the C-390 Millennium military transport aircraft. The agreement, announced at the Farnborough International Airshow in the United Kingdom, introduces a kinetic strike role to the Brazilian manufacturer’s tactical airlifter.

In a press release issued by Embraer, the companies confirmed the partnerships aims to allow the C-390 to conduct palletized launches of kinetic effects. This capability enables dispersed operations and allows transport aircraft to serve as stand-off launch platforms without requiring permanent structural modifications.

Expanding the C-390 Millennium mission profile

The C-390 Millennium features a payload capacity of 26 metric tons (57,300 pounds) and a cruise speed of 470 knots. Integrating a palletized launch system allows operators to roll munitions on and off the aircraft using standard cargo handling procedures, temporarily converting the airlifter into a strike platform.

“By exploring the integration of stand-off launch capabilities for palletized, kinetic, and non-kinetic effects, we are further expanding the aircraft’s flexibility to meet the evolving needs of modern air forces,” said Bosco da Costa Junior, President and CEO of Embraer Defense and Security.

Anduril’s Barracuda-500M integration

Anduril Industries first successfully tested a pallet-launched Barracuda-500M (B-500M) in September 2024. The system is designed for rapid production and scalability to meet high-volume munitions requirements. On July 15, 2026, Anduril secured a procurement framework agreement with the United States Department of Defense (DoD) for large-scale production of the Barracuda 500 series, with deliveries scheduled to begin in 2027.

“Integrating the pallet-launched Barracuda-500M with Embraer’s C-390 Millennium gives allied militaries a new way to generate massed, stand-off effects from a proven airlift platform,” said Greg Kausner, Senior Vice President for Global Defense at Anduril Industries.

Kausner added that the Barracuda family of systems delivers operationally relevant capabilities to meet the growing demand for affordable munitions.

Global market demand

The C-390 has gained significant traction in the military-aircraft transport market. To date, 12 countries have selected the aircraft, including Brazil, Portugal, Hungary, the Republic of Korea, the Netherlands, Austria, the Czech Republic, Uzbekistan, Sweden, the United Arab Emirates, Slovakia, and Lithuania.

According to da Costa Junior, the push for palletized munitions is driven directly by customer interest. He noted that Embraer is receiving demand for this capability from several countries across Europe and Asia.

While the companies have not provided a specific date for the first live test of the B-500M from a C-390, Embraer representatives indicated the integration process can be completed rapidly.

AirPro News analysis

We view the Embraer and Anduril partnership as a direct response to the growing tactical interest in “arsenal plane” concepts. Programs like the U.S. Air Force Rapid Dragon have demonstrated the viability of deploying long-range strike weapons from standard cargo aircraft. By partnering with Anduril to offer a turnkey palletized strike capability, Embraer significantly enhances the value proposition of the C-390 Millennium against competitors in the tactical airlift sector. For smaller air forces that cannot afford dedicated heavy bomber fleets, outfitting a multi-role transport aircraft with stand-off cruise missiles provides a highly cost-effective deterrent.

Sources: Embraer

Embraer S.A. and Saab AB signed a Heads of Agreement (HoA) on July 21, 2026, establishing a framework to produce 20 additional Gripen fighter aircraft at Embraer’s facility in Brazil. The announcement, made during the Farnborough International Airshow, positions the companies to finalize a binding production contract later in 2026.

The agreement expands a decade-long industrial partnership between the two aerospace manufacturers and directly supports the Brazilian Air Force (FAB) requirement for additional tactical aircraft. According to official press releases from both companies, Embraer will assemble the new fighters at its Gavião Peixoto industrial complex in São Paulo State, complementing Saab’s primary final assembly line in Linköping, Sweden.

Expanding Brazilian production capacity

The HoA serves as a preliminary framework to allocate industrial responsibilities ahead of a formal contract. The move follows a June 4, 2026 announcement by the Brazilian government detailing plans to purchase 20 additional Gripen jets, supplementing the country’s original base order of 36 aircraft, according to reporting by Breaking Defense. That initial order consisted of 28 single-seat E models and eight two-seat F models.

Company leadership emphasized that the localized manufacturing model is designed to scale with regional requirements.

“The expansion of this partnership with Saab reflects the mutual trust built over the past ten years and reinforces Embraer’s strategic role in the Gripen programme. We are well positioned to support increased production capacity, if demand requires it,” said Bosco da Costa Junior, President and CEO of Embraer Defense & Security.

Recent program milestones and operational deployment

The framework agreement follows a series of recent milestones for the Brazilian Gripen program, designated the F-39E by the FAB. On March 25, 2026, Embraer and Saab unveiled the first Gripen E fighter assembled entirely on Brazilian soil at the Gavião Peixoto complex. Saab confirmed in a statement that this event marked the first supersonic fighter produced in Brazil.

Operational integration of the aircraft is also advancing. On July 14, 2026, the FAB deployed six F-39E Gripen aircraft to Chile for the SALITRE 2026 exercise. Saab noted that this marked the first time Brazilian-operated Gripens participated in a multinational exercise outside of Brazil.

“The partnership between Saab and Embraer reinforces our long-term commitment to Latin America. Together, we are strengthening our capabilities, securing additional capacity for future business opportunities, and taking a forward-leaning approach to supporting the evolving needs of our customers across the region,” stated Micael Johansson, President and CEO of Saab AB.

AirPro News analysis

We view this Heads of Agreement as a formalization of the industrial planning required to execute Brazil’s stated intent to procure 20 additional airframes. While the HoA is not yet a finalized production contract, it signals that both Embraer and Saab are aligning their supply chains and workforce allocations ahead of a formal signature expected later in 2026. By utilizing the Gavião Peixoto facility for this follow-on batch, Saab effectively creates a dual-node global production system for the Gripen E/F. This mitigates production bottlenecks in Sweden and provides a localized manufacturing base that could theoretically support future export campaigns in the broader Latin American market.

Sources: Embraer S.A.