McCain says U.S. airlines must help themselves = = = = Thursday January 9, 4:13 PM EST = By John Crawley WASHINGTON, Jan 9 (Reuters) - A key Senate lawmaker said on Thursday ther= e was room for Congress to help U.S. airlines further, but the government= should do nothing unless the industry does more to help itself. "Although there may be ways that we can be helpful, we must be cautious a= bout any effort we might undertake," John McCain, incoming chairman of th= e Commerce Committee, said at a hearing. "We should be reluctant to do an= ything that might keep inefficient businesses afloat." Industry losses for 2002 are expected to reach $9 billion with two major = carriers, US Airways (UAWGQ) and United Airlines (UAL), in bankruptcy and= other big airlines struggling with soaring costs and plunging revenue. I= ndustry debt is at an all-time high and underfunded pensions are of growi= ng concern. = While the biggest U.S. carriers struggle to survive the industry financia= l storm, other airlines are weathering it and some are even thriving. Low-cost airlines, like Southwest (LUV) and JetBlue (JBLU), have seen the= ir market share grow from 16 percent in 2000 to 20 percent in 2002, Trans= portation Department figures show. Some of those carriers have expanded o= perations and made money. "The ability of some airlines to remain profitable in the current climate= raises the question of whether there is something wrong with the rest of= the industry," McCain, an Arizona Republican, told chief executives from= American and Northwest (NWAC) airlines. Northwest, which had an operating profit, reported a $46 million loss in = the third quarter, while American, the world's biggest airline, lost $924= million. HUB AND SPOKE SYSTEM Both of those carriers have high labor costs and rely on a network of rou= tes, called the hub and spoke system, that has been criticized by some as= outdated and inefficient in the face of leaner operations at low-cost co= mpetitors. Those airlines mainly offer point-to-point service. To compete, bigger carriers have slashed schedules, retired aircraft, cut= tens of thousands of jobs and sought givebacks from labor groups and new= terms from vendors. Donald Carty, chairman and chief executive at American, said the airline = has realized half, or $2 billion, of its cost-cutting goal. McCain said this type of wholesale austerity may be necessary before addi= tional congressional aid can be considered. Congress approved a $15 billi= on industry bailout after the Sept. 11, 2001, hijacked aircraft attacks, = and gave the industry some relief from soaring premiums for high-end liab= ility insurance in 2002. "The aviation industry may simply need to adjust to the new realities of = air travel before we can take any further significant action," McCain sai= d. The airlines want lawmakers to assume more or all of the aviation securit= y costs that airlines must pay and amend the law governing airline contra= ct negotiations. Neither lawmakers nor the Bush administration have embraced the call for = tax relief, but McCain and others on the Commerce Committee believe chang= es to the Railway Labor Act should be considered. = =A92002 Reuters Limited. = Roger EWROPS