Qantas cuts ties with Rugby Australia in $20 million bombshell

Qantas has announced an end to its 30-year partnership with Rugby Australia as it continues to manage the fallout from coronavirus on the aviation industry.

Just days after announcing massive salary cuts for its executives, Qantas said it had reviewed five key sporting sponsorships.

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That includes Rugby Australia, who they have sponsored since 1990.

“Regrettably, Qantas is not in a position to continue its 30-year relationship with Rugby Australia beyond the end of this calendar year,” the airline said on Wednesday.

However, Qantas will continue its association with Cricket Australia and the Football Federation of Australia on an “in-kind basis” for the next 12 months, before a further review takes place.

The national carrier will also continue its association with the Australian Olympic Committee and Paralympics Australia, with a view to supporting athletes at the rescheduled Tokyo Games in 2021.

“In an environment where thousands of our people have lost jobs and thousands more are stood down while they wait for flying to restart, we can't maintain these sponsorships in the way we have in the past,” Qantas chief customer officer Stephanie Tully said.

“While we’re dealing with this crisis and its aftermath, the cash cost of our sponsorships has to be zero.”

The changes are expected to save the financially strapped airline $20 million a year.

She said the airline’s partners had been incredibly understanding of the situation, particularly as most are facing their own COVID challenges.

“Qantas has had a very long association with Rugby Australia and the Wallabies, and we've stuck with each other during difficult times,” she said.

“Unfortunately, this pandemic has been the undoing. Like all Australians, we'll continue to cheer them on from the sidelines.”

Fresh blow for cash-strapped Rugby Australia

With its current broadcast deal set to expire at the end of 2020, the loss of Qantas, who has been the naming rights sponsor since 2004, is another hit for rugby.

The withdrawal is not entirely unexpected, given the impact of COVID-19 on the airline industry.

“While it is obviously disappointing to lose such a loyal partner, it is understandable given the world we are all now living in, and the challenges we are all facing,” RA chief executive Rob Clarke said in a statement on Wednesday.

“There aren't many 30-year partnerships in Australian sport, and I want to thank Qantas for everything they have done for our great game.”

In June, Rugby Australia said it will shed one-third of its workforce as well as cut salaries as it looks to save $5.5 million in phase one of a brutal wholesale restructure.

After lodging their 2019 financial report that provisionally flagged a $9.4-million loss, RA interim chief executive Rob Clarke announced the massive job cuts in an attempt to reshape the cash-strapped code.

Over 75 per cent of RA’s workforce has been stood down or on significantly reduced hours since April 1 and many won’t return at all, with Clarke announcing they would shed 47 of the 142 full-time staff over the coming months.

A further 30 contractors and casual workers have also had their roles terminated with immediate effect.

The full program of cuts will reduce the company’s current wages bill by $5.5 million.

In addition, RA is seeking to implement a five per cent reduction in base salary for all senior retained staff to take effect from their return date.

with AAP