· Emirates is the most valuable airlines brand worth US$7.7 billion
· Qantas posts very strong brand value growth, up 64% on 2015
· American Airlines brand value up 69% following US Airways rebrand
· Lufthansa brand value falls 27% and drops in rank from 4th to 10th
Every year, leading brand valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test, evaluating which are the most powerful and the most valuable, including the 50 most valuable airline brands.
Emirates remains both the World’s strongest and most valuable airline brand. Brand Finance Chief Executive David Haigh comments, “Emirates continues to soar, adding 17% to its brand value this year. Brand Finance’s analysis shows that Emirates is more popular than ever– its brand equity scores for consumer factors such as familiarity, consideration, preference, satisfaction and recommendation are up across the board. Emirates’ growth this year, which builds on impressive historic trends, suggests that by 2020 it could become the first Middle Eastern brand to enter the top 100 of our ranking.”
American Airlines has grown by a huge 69%. This is in large part due to the rebranding of US airways under the AA brand (following the merger in 2013) rather than organic brand value growth. However the rebrand contributes more than a mere re-allocation of revenues. The merged carrier can offer passengers a wider network of routes, improving brand strength and generating economies of scale for marketing investment. American is pioneering the opening up of Cuba to air travel from the US, helping to reinforce its position as more than just an incumbent.
Qantas has also seen impressive brand value growth. Scores in the ‘consumer’ section of Brand Finance’s Brand Strength Index have seen a marked increase, while perceptions among external stakeholders and staff have also improved significantly on 2015. The financial picture looks positive too with forecast revenues and margins on the up. Brand Finance Associate Director Savio D’Souza said, “Qantas has been able to maintain brand vitality in the face of some significant but important cuts that have improved profitability, brand value and Qantas’ financial sustainability.”
In contrast Malaysia airlines has had another bad year as it continues to endure the fallout of two notorious plane crashes in 2014. Brand value is down 26% to US$462 million and it has become the weakest brand in the top 50, with an ‘A’ brand rating. Lufthansa has experienced an even more significant decline however. Brand value is down over a billion dollars following a 27% drop. Brand contagion from the Germanwings crash has been relatively limited, Lufthansa’s problems are rather more systemic. Its market share is being eroded by budget carriers, with Ryanair launching a four times daily service between Berlin and Cologne (one of Lufthansa’s key routes) in 2015.
Brand values for hundreds of the world’s top brands from all industries can be found on Brand Finance’s website.
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.
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.