SYDNEY • Australian flag carrier Qantas axed its long-running sponsorship of the Wallabies yesterday as part of a coronavirus-related cost-cutting drive, deepening the financial crisis engulfing Rugby Australia (RA).

The airline 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 A$2.7 billion (S$2.6 billion).

"While we're dealing with this crisis and its aftermath, the cash cost of our sponsorships has to be zero," its chief customer officer Stephanie Tully said in a statement.

Qantas added that it would offer "in-kind" support such as flights for Cricket Australia and Football Federation Australia for the next 12 months, as well as supporting Australia's Olympic and Paralympic athletes at the Tokyo Games.

But it has decided to completely cut ties with the national rugby team as part of the sponsorship shake-up, ending a 30-year association reportedly worth A$5 million annually to the rugby body.

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.

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 shredded by the crisis.

RA interim chief executive Rob Clarke called Qantas' decision "obviously disappointing", but hailed the airline for its decades-long 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 the reasons for dumping the deal.

He told reporters: "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."

AGENCE FRANCE-PRESSE