Qantas turbulence delivers $384m blow to brand value, report finds

A turbulent 12 months has wiped $384m off the value of the Qantas brand and weakened the airline’s ability to retain customers, says a new report of global airlines’ brand strength and worth.

A turbulent 12 months has wiped $384m off the value of Qantas’s brand, according to an annual analysis of global airlines’ brand strength and worth.

The Brand Finance report ranked Qantas 21st in the world in terms of airline brand value, down from 16th last year, after a series of controversies and setbacks.

It is the first time a dollar figure has been placed on the brand damage associated with the consumer outrage, high airfares, executive salaries and poor performance that has dogged Qantas during the past year.

Brand Finance Australia managing director Mark Crowe said the 12 per cent decline in Qantas’s brand value, from $3.1bn to $2.7bn, was at odds with the average 17 per cent increase across the top 10 airlines’ brands.

“This highlights how much Qantas’s performance is trending against the strong recovery in the sector,” Mr Crowe said.

“However, favourable market conditions are expected to uplift Qantas’s investment in customer experience to strengthen its brand, therefore arresting a further decline in value.”

US carrier Delta Air Lines topped the rankings for brand value, followed by American, United and Emirates, then Southwest Airlines, British Airways and Qatar Airways.

Mr Crowe said the largest airlines typically had the biggest brand value because of their scale.

What could be more worrying for Qantas was its exit from the top 10 “strongest brands” after it ranked seventh in 2023, and had consistently rated in the top five since 2018.

Qantas scored a total of 71.35, its worst result in nine years and down from 78.1 last year, and a high of 86.6 in 2019.

Brand Finance CEO David Haigh said a strong brand helped a company differentiate itself from its competitors and establish a unique identity in the market, which in turn led to increased customer loyalty and retention.

“In addition, a strong brand can help a company attract top talent, as employees may be more attracted to work for a well known and reputable brand,” Mr Haigh said.

“Finally, a strong brand can provide a company with a competitive advantage and help it weather economic downturns or industry disruptions.”

Qantas said it remained confident it was on the right track to rebuilding its reputation and brand, after committing $230m to customer improvements, investing in new aircraft, updating its technology and empowering frontline staff to help with a faster recovery when things did not go to plan.

A spokeswoman said it was listening to customers’ feedback and was focused on earning back their trust.

“A significant amount of work and investment is under way to fix customer pain points and restore pride in Qantas, but we know it will take time to turn things around,” the spokeswoman said.

CEO Vanessa Hudson, who ­issued a public apology to customers shortly after she replaced Alan Joyce in September last year, said returning Qantas to the trust and pride the airline had previously enjoyed was her “absolute relentless focus”.

“We have started but it’s a journey and we are seeing the results,” Ms Hudson said last month. “We’re seeing our customer satisfaction lift.”

Advertising executive and marketing guru Dee Madigan said Qantas was fortunate to have built a good brand over its 103-year history that gave it a “little bit of buffer in a crisis”.

“That’s why they haven’t been hurt as much as they probably deserve to be,” Ms Madigan said.

“I think people want to like them and are open to liking them again. The other thing is basically they’re our only full-service airline given Virgin is being run as a low-service airline, so people are almost forced to travel with them.”

While a lack of competition and a long relationship with travellers might work to Qantas’s advantage, Queensland University of Technology marketing lecturer Michael Klaehn said performance and experience were what mattered to customers.

“If people have a bad experience, the theory is they will tell seven others. With social media platforms that’s probably amplified significantly, which shows the challenge companies like Qantas face,” Mr Klaehn said.

“People are more willing to talk about their bad experience than their good experience, so the key is to ensure that experience is as good as it can possibly be.”

He said the commitment to a fast recovery in the event of a flight delay or cancellation was already evident and working in Qantas’s favour.

Qantas shares rose 1.1 per cent on Wednesday to $5.41 – down almost 17 per cent on a year ago.

Originally published as Qantas turbulence delivers $384m blow to brand value, report finds