SINGAPORE - 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".