Skip to main content

Advertisement

Advertisement

F1 sponsorship to rev up SIA’s brand image: Analysts

SINGAPORE — The title sponsorship of the Formula 1 (F1) Singapore Grand Prix by Singapore Airlines is unlikely to have a direct, tangible impact on the carrier’s performance, but at a time of fierce competition in the global aviation industry, the move may make a strong contribution from a branding perspective.

SINGAPORE — The title sponsorship of the Formula 1 (F1) Singapore Grand Prix by Singapore Airlines is unlikely to have a direct, tangible impact on the carrier’s performance, but at a time of fierce competition in the global aviation industry, the move may make a strong contribution from a branding perspective.

Analysts told TODAY it makes sense for SIA to be associated with a high-profile, sell-out motor-racing event that has a huge global following, although it will be difficult to quantify whether the airline will get an acceptable return on its investment.

“With sponsorships, companies often look to transfer brand attributes. In this case, F1 is one of the very few truly global and premium sporting events, one that can also evoke a sense of luxury, excitement and adventure for SIA’s brand,” said Mr LarsVoedisch, Managing Director of public relations and social media consultancy Precious Communications. “It’s also a good choice for SIA because both SIA and F1 are associated with Singapore, but are also international brands that resonate with a premier audience. I think they are a great fit.”

Agreeing, Mr Timothy Ross at Credit Suisse’s Asian Equities Transport Research said: “F1 clearly identifies with Singapore and is probably the Republic’s most significant international event. This is one of those top-tiered sponsorship opportunities.”

SIA’s sponsorship, announced yesterday, comes at a time when the carrier’s market position is challenged by a slew of emergent players in the full-service and low-cost segments, leading to persistent margin and yield pressure on its earnings.

Until now, SIA had been lagging behind its competitors in providing sports sponsorship, said Mr Voedisch.

“SIA knows it’s late in the game, having seen its competitors having success with sports sponsorships and tie-ups. Emirates Airline, for example, is recognised by football fans globally. This has put SIA in a defensive position,” he added. “With F1, it can hope for similar effects, but in a segment that is less mass (-market) and more affluent.”

On this front, the carrier may be able to use its association with F1 to create exclusive offerings that can help it stand out in the high-end segment.

“As is typical of F1 sponsorships, SIA may get a certain amount of exclusive or paddock-access tickets, which offer the most premier experience at the F1 event,” said Mr Voedisch. “In this case, SIA can potentially use the access to create exclusive experiences for premium customers, who are a segment that is all about creating experiences money can’t buy — for example, access to the pit lane or events in which you can interact with drivers.”

However, the exercise should not be expected to translate into a direct return. “Sponsorships are rarely driven by ROI (return on investment). They are mostly about brand awareness and positioning — not for driving sales.”

The benefits are far from guaranteed, Mr Ross noted. “Having sponsorship of premier events doesn’t guarantee you any form of success. The Royal Bank of Scotland is one such case, having to pull out in 2010 amid financial troubles. F1 will be a trophy sponsorship, sure, but its benefits are what SIA can make of it.”

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.