United Airlines reported their Q2 results today, and not surprisingly, the carrier is reporting a loss. Even less surprisingly, the carrier is siting rising fuel costs as the major cause of that loss. Excluding accounting charges, UAL experienced a Q2 net loss of $151 Million. The airline foresees continuing fuel issues into Q3 and Q4, expecting a $3.5 Billion increase on fuel expenditures in 2008 as compared to 2007.

So, how does United plan to offset these fuel costs? They’re reducing capacity and significantly reducing their fleet (retiring their 737s from action). United Airlines also believes their partnership with Continental will shape the way major airlines operate in the future, and help them to turn a profit. The plan is for this partnership to go well beyond a codeshare agreement. United Airlines and Continental Airlines hope to align their frequent flier programs, combine their buying power, and increase opportunities for shared revenue. United Airlines also plans to seek out similar partnerships in Latin America.

Unfortunately, United Airlines has also increased their foreseen job cuts from 1,500 to 7,000 by the end of 2009.

Despite Q2 losses and continuing fuel cost issues, UAL sees itself as being in a “solid cash position” with the ability to achieve profitability in the current environment.

We’ll let you know if that pans out as Q3 gets underway.