A price war in the skies is set to take its toll on travel recruiters.

With carrier Virgin Atlantic announcing that it plans to slash business class fares to New York by 40%, John Tolmie, managing director at AA Appointments, told Recruiter that business travel was declining. “Like all ‘price wars’ the damage is done when they go on for longer than expected. A short, sharp price war is probably quite healthy just now, but if it goes on for a long time, the damage to profitabilty invariably comes with a look at costs, of which staffing is one of the most prominent.

“We don’t expect the airline staffing situation to get any better in the short term, with a prolonged price war just adding to the problems.”

Gail Kenny, managing director at Gail Kenny Executive Search, adds: “It has been generally acknowledged that business travel is being more severely affected than leisure travel, so Virgin’s action in the business sector is not entirely surprising. Airlines have the on going challenge of balancing yields and loads to try to optimise overall revenues and clearly they have moved to take action. Better to gain the initiative and the subsequent PR value, than to follow.

“Margins in the higher level end of recruitment have not as yet fallen and we do not see this happening to a significant extent, but we do expect a reduction in the number of overall recruitment assignments.”