The “big three” Arabian Gulf airlines may be in the middle of an ugly spat with their US rivals – but with the likes of Hollywood stars Nicole Kidman and Jennifer Aniston on board as brand ambassador, they have maintained a friendly public face.
Delta, United and American Airlines allege that Etihad Airways, Emirates and Qatar Airways received US$42 billion in unfair government subsidies over the past decade, claims the Gulf carriers categorically deny.
But despite the ongoing – and very public – war of words, the brand valuations of the Gulf airlines have not been negatively affected and are forecast to continue growing, experts say.
The London consultancy Brand Finance, which has a branch in Abu Dhabi and which ranks the biggest brands globally, says Emirates is likely to retain its crown as the world’s most valuable name in aviation for the foreseeable future.
Having a higher brand value is advantageous because it is tied to the money making potential of a company’s name. The brand value reflects what a company would have to pay to use its brand if it did not already own it.
The Dubai airline, which has a brand valuation of $6.6bn according to the company, is likely to stay ahead of Delta – which is ranked second, with a brand value of $6.3bn – when the next Brand Finance rankings are published in February, the consultancy says.
With Abu Dhabi's Etihad and Qatar Airways expected to enter the top-10 listing of the world's most-valuable brands over the next few years, the subsidy spat does not appear to be putting a dent in public perceptions, experts say.
“There seems to have been limited impact from the brand point-of-view,” says Robert Haigh, the marketing and communications director at Brand Finance in London.
The UK company releases its annual league tables of brand valuations every February, so the current published figures do not fully account for the impact of the subsidy row.
Despite the row, however, the consultancy says that the Gulf airline brands are still growing in value.
Branding expert John Brash, the founder and chief executive of Brash Brands, which has an office in Dubai, agrees that the Gulf airlines will continue to rise in the world branding leagues – with passengers largely oblivious to the airline subsidy brouhaha.
“The US carrier row probably passes most consumers by. It’s unlikely to affect perceptions, and thus a key part of brand value,” he says.
The much bigger factor in public perception of an airline brand is safety, Mr Brash says. Malaysia Airlines – which suffered two major aviation incidents in the past 18 months – saw a 41 per cent decline in its brand value, according to the Brand Finance data.
“The biggest threat to any airline brand is safety, says Mr Brash. “Witness Malaysia Airlines, a brand now on its knees, or a brand like PanAm, that disappeared entirely.
“The superb safety records [the Gulf] airlines currently have enhance their brand value, but this is a risk that’s unique to the sector – and unfortunately one that will never completely go away.”
The valuations of the three big US carriers also rose in the 2015 Brand Finance rankings published in February.
Delta’s brand increased by 34 per cent – a bigger rate of growth compared with Emirates, which saw a 21 per cent increase in value compared to February 2014.
Savio D’Souza, the associate director at Brand Finance, says the increase of the US carriers’ brand values was mainly due to lower fuel prices, adding that Delta is unlikely to overtake Emirates “anytime soon”.
The Brand Finance calculations take into account the overall financial performance of a company, as well as the revenue-earning potential of a brand name.
"The American airlines have mainly only gone up because they've benefited from lower oil prices," Mr D'Souza says. "They haven't really addressed the core issue of improving the customer experience like Emirates has done, in terms of actual in-flight experience and connectivity."
The aviation analyst Saj Ahmad, of the UK’s StrategicAero Research, also says passengers’ opinions have not been adversely affected by the subsidy allegations made by the US airlines.
“They simply don’t care. They realise that the Gulf airlines provide everything far better than any US airline could ever hope to achieve in the next 50 years,” he says.
“The saving grace here is that many passengers are fed up of US airlines providing poor service, poor value for money and then having the gall to cry about profit warnings while reporting high profits in the same breath.
“That’s why consumers will not, and have not to date, been duped by the subsidy allegations.”
High-profile global sponsorship and endorsement deals are also part of the reason why the Gulf airlines’ brand valuations are soaring, experts say.
Etihad has a multimillion-dollar agreement with Manchester City football club, among numerous other sponsorships, while Qatar Airways paid the Spanish team FC Barcelona more than €32 million (Dh130m) last season in sponsorship rights alone.
Emirates has a raft of global sports sponsorships, including agreements with Arsenal FC, AC Milan, Real Madrid and Paris Saint-Germain.
And the Dubai airline in August confirmed that the popular American actress and Friends star Aniston is its new brand ambassador, in a deal reportedly worth $5m.
Mr Haigh says that move is largely focused on the US market – and can be seen in light of the transatlantic subsidy row.
“It does seem like quite a strange move in the sense that it’s quite a departure from the sponsorships and endorsements [Emirates has] previously been best-known for.
“But I suppose the logic there is that, although [Aniston] is not exactly at the peak of her fame, she remains a very big celebrity in the US,” says Mr Haigh.
“I’m sure people have described her as ‘America’s sweetheart’ at various points over the years,” he adds.
“So I suppose in that respect it’s a tactical move.”
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