Airlines need to begin looking closely at their fleet management and labor plans in anticipation of a “downward spiral” in the air transport market caused by global trade tensions, consulting firm ICF said. 

The warning follows similar concerns by industry officials. Airbus CCO Christian Scherer raised the possibility of “tsunami effect” caused by the trade conflicts between the US and other major economies, especially China. Speaking at the IATA AGM, he said retaliatory tariffs could raise fares and aircraft costs.

To prepare for a potential crisis, fleet management, especially the balance between owning and leasing aircraft, or having the option to defer or accelerate deliveries to better react to overcapacity, needs to be studied by airlines, ICF VP Jared Harckham said.

Employment policies, such as employing contract staff or allowing long-term leave, also should be reviewed, he said.

That means airline must have a good rapport with aircraft manufacturers and trade unions, Harckham said. Unions might not welcome long-term leave, which, if implemented, must be planned well in advance of any crisis, he said.

The impact of unexpected events is illustrated by the sudden worldwide grounding of the Boeing 737 MAX after two crashes in five months, Harckham said. He described the episode as a shakeup for the industry, forcing regulators to scrutinize aircraft certification more deeply.

The grounding also offered opportunities for lessors as airlines scrambled to restore lost capacity,

ICF airlines-aerospace and MRO practice lead Martin Harrison said.

He also sees the possibility of Boeing lowering the price of the MAX, and airlines then could “ride the wave” and purchase new aircraft.

Chen Chuanren,