Aer Lingus have withdrawn as co-sponsors of Ireland's staging of the Ryder Cup, scheduled for the K Club in 2006. In fact, the troubled airline is either pulling out of or not renewing 12 sponsorships, including the Smurfit European Open.

Given the events of the last few weeks, the company felt that these decisions were inescapable, with a third of their workforce being made redundant. "Regrettable but necessary" was how the action was described last night by Aer Lingus public relations manager, Declan Conroy.

Because of the unique structure of the Ryder Cup deal which was announced by Minister for Sport, Dr McDaid, during the 1997 staging at Valderrama, Aer Lingus have already paid over roughly half of their financial commitment to the tournament. But their withdrawal at this stage will save the company about £600,000 in repayments and considerably more in terms of their projected spend between now and 2006.

"We were planning a major promotional campaign, working up to the event itself," said Conroy. "This would have run to about £2 million."

Ireland were awarded the Ryder Cup after Bord Fβilte had agreed to pay the PGA European Tour £7 million, spread over seven years. Bord Fβilte then negotiated a separate deal whereby 50 per cent of that outlay would be underwritten by three commercial partners: Allied Irish Bank, Aer Lingus and Waterford Crystal.

This meant each company would be putting up £1.1 million to be paid in seven annual instalments. Three of those instalments have already been paid and, according to Conroy, no adjustment has been made so far in the wake of the postponement from 2005 to 2006.

Ironically, the impact of the Aer Lingus withdrawal will be felt directly by another semi-State company, Bord Fβilte, who may now have to seek a replacement sponsor. Either way, neither the European Tour nor the K Club will be affected.

I understand that Aer Lingus support of the European Open would be valued at more than £50,000 per year, and an additional £10,000 in travel vouchers was donated as a prize to the leading Irish professional. The other affected sponsorships are small by comparison.

Meanwhile, Conroy made no secret of the profound disappointment within Aer Lingus at having to relinquish such a prize.

"Along with the Olympic Games and the soccer World Cup, the Ryder Cup is one of the three biggest events in world sport," he said. "In that context, I think it is important to point out that we have already benefited significantly from our involvement as commercial partners. Indeed the structuring of the deal over such a lengthy period made it extremely attractive."

The situation at Aer Lingus is not unlike that which forced Carrolls Tobacco Company to abandon its sponsorship of the Irish Open after the 1993 staging at Mount Juliet. Carrolls had been involved in sponsorship of the event in different guises since 1963, including a re-launch of the Irish Open under their banner in 1975.

Falling sales, however, led to redundancies within the company. In those circumstances, the management found it increasingly difficult to justify a hefty, annual spend on a golf tournament. So it was that Murphy's took over sponsorship of the country's premier golf event in 1994.

The withdrawal of Aer Lingus support of the European Open will be felt largely by the European Tour, who co-promote the event with the Jefferson Smurfit Group.

"In all cases, we believe we got value for money, but this decision is final," said Conroy. "We will be reviewing the situation in a year or so, by which stage we would expect a significant upturn in the company's fortunes.

The long-term viability of the airline is paramount."