Delta is now the world’s most valuable airline brand, as its brand value grew 16% over the past year to US$10.1 billion.
According to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy, Delta steals pole position from American Airlines.
Far East brands hold first class values
New routes, new airports, and new ventures are set to strengthen the performance of airline brands taking advantage of the ever-growing demand for travel in Asia-Pacific. Notable performances from the Far East come from:
China Southern (up 10% to US$4.5 billion), China Eastern (up 11% to US$4.2 billion), Air China up 20% to US$ 4.1 billion, Xiamen Airlines which has soared 70% to US$1.1 billion) Air Asia (up 35% to US$1.3 billion) and Korean Air (up 21% to US$1.8 billion). New entrant Spring Airlines, whose brand value of US$0.6 billion puts it in 50th position, is China’s largest low-cost airline.
Boeing 737 MAX 8 impact
Mergers are part of the success story behind this year’s top four American airlines and this healthy growth is likely to continue. Star performer Delta, (brand value up 16% to US$10.1 billion) is currently considering buying Alitalia which will give it access, for the first time, to long-haul flights in Europe. Whilst Southwest Airlines is the fastest growing brand in the top four, (up 24% at US$6.9 billion) the recent grounding of its 737 MAX 8 aircraft following the Ethiopian Airlines crash, could affect it and American Airlines’ returns. Delta however does not use the MAX and may capitalise from the groundings.
EK slips down as BA retains top 10 spot
Whilst leading Middle Eastern airline Emirates (up 17% to US$ 6.26 billion) slips to fifth position in this year’s top ten, it continues to win praise from its customers for its variety of long-haul routes, world class lounges, superb on-board service and punctuality. British Airways retains 8th position (up 20% to US$4.1 billion) and wins plaudits from customers for its airport lounges, flight schedule flexibility, and loyalty reward schemes. Lufthansa, currently in 10th place (brand value up 8% to US$3.14), is looking to extend its share in the lucrative low-cost airline sector. Industry insiders suggest it is interested in buying Norwegian Airlines (down 7% US$0.9billion) or Wizz Air (up 42% to US$ 0.7 billion). Hungarian low-cost airline Wizz Air is said to have the lowest operating cost in Europe.
David Haigh, CEO of Brand Finance, commented, “Growth in the airline market is dependent on a brand fully grasping and meeting the demands of its customer, something which, with the rise of social media, is constantly evolving. Whilst pricing, routes and service remain central to repeat business, airlines which capitalise on USPs, the huge growth potential in emerging markets and are simultaneously sympathetic to sustainability by investing in more fuel-efficient planes, are the ones most likely to prosper.”
Aeroflot flies high as world’s strongest airlines brand
Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Along with the level of revenues, brand strength is a crucial driver of brand value.
According to this criteria, Russia’s flagship carrier Aeroflot is the strongest brand in the Brand Finance Airlines 50 2019 ranking, with a Brand rating of AAA+ up from AAA last year. The Moscow headquartered brand was also named Best Airline in Eastern Europe for the seventh time at the 2018 Skytrax World Airline Awards.
Aeroflot’s brand value growth of 6% to US$1.5 billion can be attributed to the expansion and addition of new routes to Dubai World Central, Phuket, Marseille and Palma Mallorca. The group has an ambitious aim of carrying 100 million passengers by 2023, marking the 100th anniversary of the group and Aeroflot brand. Crucial steps towards achieving this goal will be for the brand to continue its focus on investment in sustaining brand strength and therefore upholding its AAA+ rating through to the following year.
