American Airlines Keeps Sponsorship Budget Intact
American Airlines expects its spending on sponsorships, including sports deals, to remain flat in 2009 despite a recession that has caused consumers to curtail travel plans, a senior marketing executive for the company said.
"We've had to right-size the kind of sponsorships that we do. It has gone down in the past three years, but we started this whole process quite a long time ago," Billy Sanez, AMR's director of advertising, promotions and corporate communications, said.
"It's going to be flat," he said of 2009 sponsorship spending by AMR. "We may do a bit more on the entertainment side."
American Airlines spent between USD$45 million and USD$50 million on sponsorships in 2007, according to IEG, a company that tracks sponsorship spending.
Sanez declined to say how much his company spends annually, but said about three-quarters of the budget is spent on sports.
AMR has naming rights deals for two arenas that are home to the National Basketball Association's Miami Heat, as well as the Dallas Mavericks basketball and Dallas Stars hockey teams. It also has sponsorship deals with the National Football League's Dallas Cowboys, and Major League Soccer and several of its teams.
American and its rivals in the airline industry are slashing capacity to match travel demand, which has slumped during the recession. Major downsizing began last year as carriers attempted to offset high fuel costs.
AMR, which posted a fourth-quarter loss, said in January it expects its mainline capacity to decrease by more than 8.5 percent in the first quarter amid economic uncertainty.
Most US sports leagues have been hurt by the recession and the resulting pullback in consumer and corporate spending. The National Football League and National Basketball Association cut jobs, Major League Baseball froze its 2009 budgets and some smaller leagues have folded teams.
AMR loves sports because of the passion of the fans, Sanez said. "We like to be where our customers have an affinity to. Sports is something really big," he said.
However, AMR is not looking to sign any new sports deals unless a good opportunity presents itself, he added.
Sports teams and leagues have become more sensitive to helping sponsors build relationships with fans since the economy weakened, Sanez said.
Companies try to build on sponsorship deals with such activities as promotions, partnerships and rewards, he said. These vehicles are meant to form ties with fans and can turn into sales down the road.
