US Airways and United Report Large Losses

United reported a loss of $2.7 billion for the June-ending second quarter, while US Airways' losses were $567 million.

Excluding special items, United suffered a $151 million loss for the period; US Airways, $101 million.

United noted in its news release that the quarter's earnings were $425 million worse than the same period last year.

"Our industry is challenged as never before by the unrelenting price of oil, and United is taking aggressive action to offset unprecedented fuel costs and to strengthen the competitiveness of our business," United president, chairman and CEO Glenn Tilton said in a statement today.

US Airways chairman and CEO Doug Parker was a bit more upbeat. "Despite our disappointing results, we are pleased with the early performance of our a la carte initiatives as we are seeing strong early sales in our Choice Seats program and encouraging revenue trends from our new first and second checked bag policies," he said in a statement. "We are also encouraged by our industry's response to the current economic environment."

United and US Airways are not the only ones facing a significant challenge. Earnings reports released last week by Delta, American and Continental show that each carrier is facing an uphill battle.

As carriers pay higher prices for jet fuel than ever before, second-quarter earnings reports signalled trouble for the health of the airline industry and the overall economy.

"We're looking at the very real possibility of one, two, maybe even three major bankruptcies that are not Chapter 11, but park the airplanes and liquidate," ABC News aviation consultant John Nance said last week.

"It's very unfortunate, matter of fact, it's a national tragedy," Nance added.

According to the Air Transport Association, which represents airlines, fuel expenses range, on average, from 35 to 50 percent of airlines' operating costs. The association said in a statement last week that it was forecasting combined losses of about $10 billion for U.S. airlines this year.

Speaking last week before a Senate subcommittee, the association's executive vice president and chief operating officer, John Meenan, said, "We are literally seeing the industry melting down before our eyes."

Meanwhile, carriers are doing all they can to trim their fuel bills, trying to reduce both the weight and speed of their planes because lighter, slower planes burn less fuel than heavier, faster ones. They're also tacking on extra passenger fees, retiring planes, making significant cuts to their fall schedules and laying off employees to confront the high price of doing business.

"I think that if oil keeps going up, if we hit the $200 level, you'll see more bankruptcies this winter," David Field, U.S. editor of Airlines Business Magazine, recently told ABC News. "And I don't want to name names, but big brand-name airlines are going to face some very tough choices."

ABC News' Lisa Stark and Matt Hosford contributed to this report.