Also Anticipates Big Q3 Loss For Struggling Carrier

It seems little is going United Airlines' way lately. From a global economic slump to enraged pilots, from high oil prices to high tempers among its sacrificial cash cows -- er, passengers -- one would assume the Chicago-based carrier is destined for good news of some kind, soon... right?

This isn't that story. The Associated Press reports United is on track to lose $544 million against contracts in the futures market, that the carrier used to hedge its fuel prices in the third quarter of 2003.

Those hedges were intended to save United money, as oil prices skyrocketed as high as $147 per barrel earlier this year... but, alas, prices have since fallen below $100, making those hedges much less effective.

As a result, United recorded $72 million in actual losses... and another $472 million in unrealized losses (those hits United shareholders have taken after they bought stock in the airline, and before they're able to sell it.) The airline was forced to put $400 million in restricted cash into those hedges, to make the balance sheets a bit more balanced.

"Yes, hedgers are underwater on their hedges but they are seeing some relief on the cash market side. That's how it should work," said Jonathan Leak, a senior vice president for risk management at airline hedge-fund firm World Fuel Services.

While United will be able to recoup some of those losses by paying a lower price for its non-hedged fuel supplies, JP Morgan analyst Jamie Baker still expects United to lose as much as $2.30 a share in the third quarter... over two times higher than the $1.08 per share loss analysts surveyed by Thomson Reuters had predicted.

FMI: www.united.com