Heathrow flies high as world’s most valuable airport brand - inaugural study

06 June 2019
This article is more than 1 year old.
  • Inaugural report into world’s most valuable airport brands ranks Heathrow top of its league, brand valued at US$919 million
  • French parent company Groupe ADP hold two of the world’s most valuable airport brands, with Paris’ Charles De Gaulle Airport ranked 5th (brand value US$544 million) and Paris Orly Airport (brand value US$152 million) in 24th rank
  • Singapore’s Changi Airport clinches title of world’s strongest and second most valuable airport brand, with a Brand Strength Index (BSI) score of 86.90 out of 100
  • 4 Chinese airports make it to the rankings, an indication of high standards exercised in Far Eastern aviation: Shanghai Pudong, Hong Kong Intl, Beijing Capital, Guangzhou Baiyun all feature within world’s top 25 airports
  • 5 US hubs are among world’s best: Los Angeles Intl, JFK Intl, Fort Worth Intl, San Francisco Intl and O’Hare Intl

View the full Brand Finance Airports 25 2019 report here

Heathrow is the world’s most valuable airport brand, with a brand value of US$919 million, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy.

The report is the first of its kind into the world’s strongest airport brands and uses a variety of metrics such as service quality, customer reviews and ratings, airport capacity, number of destinations, investment and utilization to measure the value and strength of airport brands around the world.

Heathrow is the most valuable global airport hub brand and has impressively, in the past year, managed to accommodate a record-breaking volume of 80.1m passengers, making it the busiest airport in Europe and the world’s 7th busiest airport.

The challenge now for top ranked Heathrow is to think beyond the runway debate and to monetise its valuable brand and world-class reputation by stretching the brand into adjacent categories such as consulting and managing aviation related services (e.g.: advising other airport operators on management and operations, training programs).

Savio D’Souza, Director of Aviation at Brand Finance, commented:

“A world class airport hub is one that can operate seamlessly with heavy volumes of passengers transiting, departing and arriving while also maintaining high service standards across its terminals, a superior customer service offering and a pleasant travel experience for customers.

The most valuable airport brands are those that manage to meet the demands of discerning business travellers and frequent fliers, as well as providing a comfortable and well-equipped environment to accommodate for a family embarking on their annual summer holidays.”

Groupe ADP holds 2 airport brands
French parent company Groupe ADP hold two of the world’s most valuable airport brands, with Paris’ Charles De Gaulle Airport at rank 5 (brand value US$544 million) and Paris’ Orly Airport (brand value US$152 million) sitting in 24th rank. Charles de Gaulle Airport, also known as Roissy Airport, is the largest international airport in France and the second largest in Europe. Orly is the second-busiest airport in France by total passengers annually and serves as a secondary hub for domestic and overseas territories flights of Air France and as the home base for Transavia France.

Singapore’s Changi is world’s strongest
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.

The strongest brand in the sector belongs to Singapore’s Changi Airport with a Brand Strength Index (BSI) score of 86.90 out of 100 and a corresponding AAA brand rating. Changi Airport is renowned for its world-class duty-free shops and transfer services as well as ease of access for passengers.

Already one of the most important hubs in the world, welcoming over 65 million travellers per year, the Changi Airport hub has recently part-opened a brand-new location with the complex, the architectural masterpiece named the Changi Jewel.

Built across a 1,461,000ft2 area, the new lifestyle hub has five stories above ground and five underneath, with attractions including a multi-screen IMAX cinema, a hotel, a full-size supermarket and 280 retail spaces.

In the brand strength stakes, Changi is followed by Hong Kong International Airport (86.26 out of 100) and South Korea’s Incheon (85.85 out of 100).

ENDS

Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 25 most valuable airports brands are included in the Brand Finance Airports 25 2019 report.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand Strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.

Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Airports 25 2019 report.

Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.

Brand Finance is a chartered accountancy firm regulated by ICAEW and also the first brand valuation consultancy to join the International Valuation Standards Council (IVSC).

Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.

Media Contact
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Communications Director
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About Brand Finance
Brand Finance is the world’s leading brand valuation and strategy consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.

Methodology
Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a brand 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
Brand Strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.

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 rating up to AAA+ in a format similar to a credit rating.

Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables 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, 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 Brand revenues are discounted post-tax to a net present value which equals the brand value.

Media Contacts

Florina Cormack-Loyd
Florina Cormack-Loyd
Senior Communications Manager
Brand Finance

About Brand Finance

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 nearly 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.

Methodology

Definition of Brand

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

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 Valuation Approach

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.

Disclaimer

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.