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Emirates loses place as world’s top airline brand

February 8, 2017 Headline News No Comments Email Email

Emirates has seen more than USD 1.5 billion wiped off the value of its brand over the past year, losing its place as the world’s most valuable airline brand to another, non-Middle Eastern carrier, according to the latest Brand Finance Global 500 report.

The report says American Airlines has become the world’s most valuable airline brand in 2017. American ranks 142 this year (225 last year) and Delta ranks 152 this year (213 last year). Emirates now ranks 264.

The Global 500 ranks brands by monetary value and also calculates the most “powerful” brands, as defined by the companies whose enterprise value is most strongly boosted by the strength of their brand.

Much of the Brand Finance Global 500 report, and the first 100 places in it, are available free and can be downloaded here. Information about the other placings requires subscription, but Arabian Business.com said that last year, Emirates’ brand value grew 17% to reach USD 7.7 billion, making it the most valuable brand in the Middle East.

Emirates flies lower in brand rankings

The 2017 Brand Finance Global 500, however, showed the value of Emirates brand had fallen to USD 6.1 billion. Saudi Telecom Company (STC) overtook the Dubai-based carrier in the regional rankings.

The Brand Finance Global 500 report notes: “For the last five years Emirates, now ranked 264th, had held the title of world’s most valuable airline brand, but 2017 sees a dramatic shift. Last year, Emirates’ half-year profits plunged 75%. The lower oil price might have been expected to help all airlines, however it has worked against the Gulf carriers, reducing demand from its home region.

‘The lower price has also levelled the playing field for international rivals, leading to increased competition, driving down fares.

“Finally, the strength of the dollar has increased operating costs and also had a negative FX impact on all non-US domiciled brands. As a consequence, Emirates’ brand value is down 21% to US$6.1 billion, however, it retains its AAA rating. In contrast, the US’ airlines have all soared in value.”

“The Gulf carriers’ loss has been their gain, leading to 60%, 47% and 59% year-on-year gains for United, Delta and American.”

The report notes that Boeing and Lockheed Martin have “grown impressively in brand value, rising 17% and 32% respectively”.

“President Trump’s commitment to increase military spending and his apparent economic patriotism have improved forecasts and American brands in the industry can expect to benefit in the near future.

“Conversely, Airbus [which ranks 153 on the 2017 list, one behind Delta] has seen a 10% drop in value. The company has been forced to rein in production of the A380 after winning fewer orders than expected, leaving the company in financial disappointment.

“Speculation has arisen that Airbus might consider cancelling the superjumbo, which would hurt the brand value further,” the report says.

Written by Peter Needham

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