US Airways Group (UAIR), urgently trying to cut costs to avoid another trip through bankruptcy, Tuesday posted a quarterly profit but predicted more losses in the second half of the year.

The No. 7 U.S. airline said second-quarter net income amounted to $34 million, or 59 cents a share.

Arlington, Va.-based US Airways posted a net profit of $13 million, or 25 cents a share, a year earlier with the help of a one-time government aid payment. Without the aid, the airline had a big loss last year.

US Airways (search), 16 months after emerging from bankruptcy, is examining every aspect of its business in an effort to slash costs further.

"While we reported a small profit, we should have done significantly better in the second quarter, which is traditionally our best," Chief Executive Bruce Lakefield said in a statement. "Absent an immediate and dramatic reduction in costs, this nominal profit is insufficient, and we will likely be faced with additional second-half losses."

The company said fuel hedges (search) and the sale of four aircraft both favorably impacted its results.

But yields, or average fares, remain under pressure, the carrier said, as it is forced to lower fares to compete with discount airlines. The company's current cost structure does not allow for sustained profitability, it said.

US Airways ended the quarter with a cash balance of $1.73 billion, including $975 million in unrestricted cash.