Australian flag carrier Qantas axed its long-running sponsorship of the Wallabies Wednesday as part of a coronavirus-related cost-cutting drive, deepening the financial crisis engulfing Rugby Australia.
Qantas said it could not justify paying for sponsorships when the Covid-19 pandemic meant it was cutting 2,500 jobs and had posted an annual pre-tax loss of Aus$2.7 billion (US$1.9 billion).
"While we're dealing with this crisis and its aftermath, the cash cost of our sponsorships has to be zero," the airline's chief customer officer Stephanie Tully said in a statement.
Qantas said it would offer "in-kind" support such as flights to Cricket Australia and Football Federation Australia for the next 12 months, as well as supporting Australia's Olympic and Paralympic athletes at the 2021 Tokyo Games.
But it cut ties completely with the national rugby team as part of the sponsorship shake-up, ending a 30-year association reportedly worth Au$5.0 million ($3.6 million) annually to Rugby Australia.
The decision is a huge blow to RA, which lost almost A$10 million last year and axed 47 workers -- a third of its staff -- in June due to the pandemic's impact on its bottom line.
The organisation is also without a broadcast partner after an ill-timed effort to push for a better deal coincided with the sporting calendar being thrown into turmoil by the Covid-19 crisis.
RA interim chief executive Rob Clarke said Qantas' decision was "obviously disappointing" but thanked the airline for its decades of support.
"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," he said in a statement.
New Wallabies coach Dave Rennie said he could not disagree with Qantas' reasons for dumping the deal.
"It's understandable isn't it?" he told reporters after announcing he was retaining flanker Michael Hooper as the Wallabies captain.
"It's been a tough time and Qantas has been hugely affected by Covid and had to lay off a lot of staff.
"You can't be laying off staff and still be investing money in a sponsorship."
- 'Third-tier' sport? -
Qantas first began sponsoring the Wallabies in 1990 and the airline's logo has appeared on the team jersey since 2004.
"Qantas has had a very long association with Rugby Australia and the Wallabies, and we've stuck with each other during difficult times," Tully said.
"Unfortunately, this pandemic has been the undoing. Like all Australians, we'll continue to cheer them on from the sidelines."
Rugby union's demographic in Australia -- wealthy, well-connected and privately educated -- had until now continued to attract corporate dollars despite dwindling television ratings and poor on-field performances.
The two-time world champions are currently languishing at seventh in the rankings, a historic low, and were bundled out of last year's World Cup in the quarter-finals.
Qantas' sponsorship began during a golden age for rugby union in Australia, with popularity surging after wins in the 1991 and 1999 World Cups and a nail-biting loss in the 2003 final to England in Sydney.
The decline has been marked in recent years as the rugby union slipped down the pecking order of Australian sport behind rivals such as rugby league, cricket and Australian Rules.
A protracted dispute last year over former Wallabies winger Israel Folau's homophobic media posts resulted in an RA payout worth millions, and internal wrangling this year saw the departure of several top executives.
Wallaby great Phil Kearns warned last month that rugby risked becoming a "third-tier" sport in his homeland unless Australia won hosting rights to the 2027 World Cup and used the tournament to revive the code's fortunes.