What Malaysia Airlines Tells Us About Brands and Risk

Can Malaysia Airlines survive two tragedies in four months?

This is the question that Tim Calkins, a professor of marketing at Northwestern University’s Kellogg School of Management, asked this week. The question is an important, not just because many Malaysia Airlines jobs are at stake, but because it is applicable to all brands that must weather calamities, not just to Malaysia Airlines.

Calkins writes that Malaysia Airlines is most likely permanently scarred by the tragedy in the Ukraine and its lost aircraft over Asia a few months ago:

The branding problem is even bigger. Brands are associations, the connections people make when they see a name or symbol. The issue is that the Malaysia Airlines brand, after losing two jumbo jets in four months, is now connected firmly with aviation tragedy.

This is a long-term problem because brands matter when choosing an airline. Which company will provide better service and get us there safely? Brands shape our opinions.

Can Malaysia Airlines really compete long-term with a tarnished brand? One aviation analyst quoted in [an] FT article was skeptical, “It’s just too big a curse.”

The Malaysia Airlines situations bears considering when evaluating brand risk in auto finance, too. A calamitous event for an auto finance brand, even if it fortunately does not entail lives lost as in the case of Malaysia Airlines, might result in irreparable brand damage. Countrywide Home Loans comes to mind. At this point, Bank of America would never be able to resurrect the Countrywide brand, despite the fact that at one time “Countrywide” was arguably the nation’s best mortgage brand. Put another way, there is no coming back from a brand disaster, even in financial services.