Mr. and Mrs. Met pose on stage at the inauguration of Delta Air Lines ‘Let’s Go Mets’ aircraft at JFK Airport to celebrate the team’s return to the postseason on October 6, 2015 in New York City.
Brad Barket | Getty Images
As the US sports leagues continue to welcome fans to stadiums, Covid-19’s impacts are still persistent and may interfere with airline sponsorship revenue.
Data analytics company GlobalData designs sports leagues around the world that will face more than $ 300 million in sponsorship losses and “are likely to see a major withdrawal by the airline industry from its sponsorship commitments” as the industry travel recovers from Covid-19.
“Given the damage done to the industry after government imposed blockages around the world and the subsequent drop in international travel, airlines, even those that can rely on sovereign wealth funds, have seen drastic losses and job cuts,” he wrote. Patrick Kinch, sports analyst at GlobalData. “As a result, in an effort to recover costs, the airline industry is likely to withdraw from its current sporting commitments.”
Kinch added: “Rights holders will face the challenge of finding an industry that has been less problematic by the pandemic or accepting a reduced amount for their sponsorship assets.”
GlobalData released its findings on Thursday and estimates that global airlines will spend about $ 737 million in sponsorship by 2021. Of that amount, U.S. sports leagues will receive approximately $ 197 million in fees for deals with American Airlines , United and Delta.
In an interview with CNBC, Conrad Wiacek, head of sports analysis at GlobalData, estimates that United Airlines will spend $ 29 million in 2021 on sports sponsorships, of which $ 13 million in business will expire this year.
A Delta Airlines Boeing 757-251 approaches Washington Ronald Reagan National Airport (DCA) in Arlington, Virginia, on February 24, 2021.
Daniel Slim | AFP | Getty Images
American Airlines is estimated to spend $ 23.3 million this year, with approximately $ 11 million in contracts about to expire. And Delta will spend about $ 70 million, with $ 14 million in business that is about to expire.
GlobalData also projects these airlines to spend about $ 60 million on the combined National Football League, while the National Basketball Association has sponsorship contracts totaling $ 25.86 million for 2021.
Asked whether the business will be renewed, Wiacek said: “It depends on many factors; mainly how things are opening up as blockages decrease and vaccinations continue.” He added that “government support to keep airlines afloat” will also play an important role.
As part of Covid-19’s $ 1.9 trillion aid package, $ 14 billion is earmarked for US airlines, the third round of federal aid for the sector. The airlines have set aside $ 1 billion. American and international airlines serving the United States transported 398 million people last year, a 62% decline from 2019, according to the Department of Transportation.
In addition to the general decline in travel, the pandemic brought airlines’ sports charter business down as seasons were postponed or shortened. Before the Covid-19 attack, airlines added services for major sporting events, such as college football qualifiers.
Wiacek added that airlines can be helped if consumers start traveling, especially to watch sports teams play. If demand improves, airlines can maintain some of their sponsorship deals.
“People are going to want to travel; they are going to want to fly, and things like sports are the motivators for that,” said Wiacek. “This is the bright spot and what airlines can look for – the eagerness to get back to normal.”