S'pore Girl gets up to speed with F1 deal
SINGAPORE Airlines (SIA) has sewn up a deal with the Formula One Group to be title sponsor for the Singapore Grand Prix (SGP), in a much-needed move to boost the carrier's premium branding, said analysts.
SIA takes on the mantle in September from SingTel, which has been the title sponsor since the inaugural night race was held here back in 2008. Observers say that SIA is a more natural fit for the F1 brand, but are waiting to see how it exploits the opportunity.
The carrier is expected to pay close to what its predecessor forked out for the sponsorship in past years, in the ballpark of US$10 million (S$12.5 million) annually.
It is not a small sum, but SIA will stand to gain more from the F1 partnership than SingTel, experts noted.
Dr Seshan Ramaswami, associate professor of marketing education at the Singapore Management University, said that SingTel's brand name is "primarily entrenched among Singaporean consumers" and the telco was "never in a great situation to exploit the global reach of F1".
SIA, conversely, has a growing network of countries it flies to, and through F1, it adds brand associations of "glamour" and being "world-class", added Prof Ramaswami.
The SGP, which will be held from Sept 19 to 21, attracts a global television audience of around 360 million and about 40,000 international visitors each year, reports said.
The race here is estimated to cost about S$150 million each year to organise, with 40 per cent borne by SGP and 60 per cent co-funded by the Government. But it brings in about S$150 million worth of tourism revenue yearly.
For an airline that has seen "anaemic growth" in the past three years, the sponsorship move is essential to retaining its status and customers, said Maybank Investment Bank's regional aviation analyst, Mr Mohshin Aziz.
As other full-service airlines have "benchmarked" themselves against SIA and given the carrier a run for its money, SIA has to share the pond with other "big fishes".
For example, the carrier's previous formula of selling the top-notch service standards of its cabin crew has been replicated by other competitors such as Emirates and Qatar Airways, diluting its effect, he explained.
"The Singapore Girl is not pulling as much (weight) as before... so there's the tried-and-tested route which airlines like AirAsia and Virgin have gone down... sports," said Mr Mohshin.
As SIA has always pitched itself as a "premium" product, the association with F1, which is targeted at a high-end audience, is not unexpected, he added.
Prof Ramaswami added that SIA could, for example, offer special deals to its "most sought-after customers in first and business class in North America, Europe, Japan and Australia".
SGP executive director Michael Roche said that it hopes to work with SIA's global offices, and to tap on the airline's airport lounges and priority passenger base to further its marketing efforts.
Mr Samir Dixit, managing director for the Asia-Pacific at Brand Finance, said it remains to be seen whether SIA will really benefit from the sponsorship.
"During the SGP, everyone will talk about SIA. But outside of that, there is not much connection to the Grand Prix as a whole," Mr Dixit said.
Other sponsors back teams and F1-related events to ensure that their branding is emphasised throughout season and across countries, he added.
"In the end, will the sponsorship be a value driver or just costs to SIA?" Mr Dixit asked.