The stock price of Independence Air's parent, Flyi Inc., plunged 29 percent yesterday after a Wall Street analyst offered a grim forecast for the four-month-old low-cost carrier.

The Dulles-based airline is "looking at large losses" and a potential Chapter 11 filing "by January, when it must make a large aircraft rent payment," wrote Robert N. Ashcroft, an analyst for UBS Investment Research.

"It's clear to us that Flyi's business plan isn't working," Ashcroft wrote.

Rick DeLisi, a spokesman for the airline, declined to comment on UBS's assessment but said Flyi will offer a "description of our financial situation" when it releases its third-quarter financial results next Wednesday. Flyi has a $100 million lease payment due on its 87 regional jets in January, he said.

"Our service continues to be very well received by customers," DeLisi said.

The bankruptcy warning from UBS came before the airline reported that its September load factor -- the percentage of seats it sold -- was 44.4 percent, down from 45.5 percent in August. That compares with September load factors of 76.6 percent for JetBlue Airways and 63.2 percent for Southwest Airlines. Both are low-cost carriers.

Flyi shares closed yesterday on the Nasdaq Stock Market at $2.43, down 97 cents.

Independence Air's blue-and-white planes have become a familiar sight in the skies around Washington Dulles International Airport. The airline flies 50-seat regional jets to 38 cities.

Its $30 million marketing campaign includes musician Chuck Berry and political consultants James Carville and Mary Matalin.

Independence Air was born in June when Atlantic Coast Airlines, a regional carrier for Delta Air Lines and United Airlines, transformed itself into a low-cost operation. The company reported a $27.1 million loss in the second quarter, citing large start-up costs for Independence.

DeLisi said Independence Air will introduce service Nov. 3 from Dulles to Tampa and Orlando on its first Airbus jets. Independence Air plans eventually to lease 28 narrow-body Airbus jets.

The airline is negotiating with the unions representing its mechanics and flight attendants. The mechanics have threatened to strike if an agreement isn't reached soon; a federal mediator has joined the negotiations.

DeLisi declined to comment on the negotiations.

"I don't think Independence set themselves up in a very wise way," said Aaron J. Gellman, a professor and transportation specialist at Northwestern University's Kellogg School of Management. "They started with a rather large pattern of service with enormous frequency that the market probably didn't need.

"They must be eating cash at a terrible rate. It wouldn't surprise me if they had to file for bankruptcy so they can stick around and fight for another day."