View the full Brand Finance Aerospace and Defence 25 2023 report here
Boeing (brand value up 13% to US$17.5 billion) remains the most valuable aerospace and defence brand in 2023. Demand for commercial aircraft increased following a return to global travel, post Covid-19. This has helped sustain Boeing’s brand value growth, which is 4% higher than its main competitor Airbus (brand value up 9% to US$14.4 billion). Boeing’s brand value does however remain 23% lower than its pre-pandemic value.
Every year, leading brand valuation consultancy Brand Finance puts 5,000 of the biggest brands to the test, and publishes over 100 reports, ranking brands across all sectors and countries. The world’s top 25 most valuable and strongest brands in the Aerospace & Defence industry are included in the annual Brand Finance Aerospace & Defence 25 2022 ranking.
Savio D’Souza, Valuation Director, Brand Finance, commented:
“Demand for Boeing’s products continues to go up post-pandemic, bolstered by some important partnerships. This included Air India’s selection of up to 290 Boeing jets to expand its future fleet, and the US Air Force awarding a number of high-value contracts to Boeing. Such contracts will be vital as the brand looks to sustain healthy brand value growth going forward and aim to surpass its pre-pandemic level.”
In addition to calculating 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. Compliant with ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 150,000 respondents in 38 countries and across 31 sectors.
Airbus (brand value up 9% to US$14.4 billion) has overtaken rival Boeing to become the strongest Aerospace & Defence brand. Its Brand Strength Index Score was 82 out of 100, up 3.4 points year-on-year, with a corresponding AAA- rating. The French brand is also the second most valuable brand in the ranking.
German arms manufacturing company, Rheinmetall, has seen the fastest year-on-year brand value growth in the ranking of 33% to US$1.1 billion. The brand’s military arm has achieved particular success in 2022 as a result of increased global defence spending in relation to Russia’s ongoing invasion of Ukraine. This is a common theme for other defence focused brands, such as Northrop Grumman (brand value up 7% to 6.8 billion).
Fellow German brand MTU followed closely behind as the second fastest growing Aerospace & Defence brand with a brand value growth of 32% to US$1 billion. MTU sustained a high order backlog at the end of 2022, highlighting evidence of the sustained demand for the brand’s products, reflecting the pick-up in global air traffic and the confidence placed in MTU by stakeholders.
As part of its analysis, Brand Finance assesses the role that specific brand attributes play in driving overall brand value. One such attribute, growing rapidly in its significance, is sustainability. Brand Finance assesses how sustainable specific brands are perceived to be, represented by a ‘Sustainability Perceptions Score’. The value that is linked to sustainability perceptions, the ‘Sustainability Perceptions Value’, is then calculated for each brand.
Boeing and Airbus had the two highest Sustainability Perception Values of US$450 million and US$399 million apiece. While both brands’ position at the top of the Sustainability Perceptions Value table is not an assessment of their overall sustainability performance, it rather indicates how much brand value the brands have tied up in sustainability perception. Boeing and Airbus also had solid Sustainability Perception Scores of 4.06 and 4.37 out of 10 respectively. Both brands have particularly focused on reducing carbon emissions, looking to invest and innovate in clean technology and set commercial aviation on course for net-zero carbon emissions.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.