Financially troubled low-cost carrier Independence Air painted a gloomy picture of its future yesterday, saying it may be forced to file for bankruptcy protection.

The airline's Dulles-based parent, Flyi Inc., said in its quarterly filing with the Securities and Exchange Commission that it won't be able to pay its bills unless it soon raises "significant funds."

"Such matters raise substantial doubt about the Company's ability to continue as a going concern," the filing said. It added that if the situation continues, it will have to file for bankruptcy protection.

Some Wall Street analysts have been predicting since last fall that Flyi may be forced to file for bankruptcy protection. The airline has raised the possibility, too, but never with the sense of urgency it demonstrated yesterday.

Flyi said it has hired advisers to make "contingent plans" for a bankruptcy filing.

In a mid-afternoon conference call with Wall Street analysts before the quarterly report was filed, Flyi chief executive Kerry B. Skeen didn't mention bankruptcy. But he raised serious concerns about the company's future and outlined steps to address its liquidity crisis.

Skeen said his 14-month-old airline plans, for example, to reduce the number of flights it offers by 17 percent this fall, eliminate service to San Jose, Calif., borrow more money, sell off some assets, delay the purchase of future aircraft and ask creditors to forgive or restructure more debt.

Flyi said it lost $98.5 million in the second quarter ($2.01 a share), compared with a $27.1 million loss (60 cents) in the same period last year when the company was a feeder carrier for United Airlines and Delta Air Lines.

Skeen told analysts: "We realize we have a tough time ahead. But we believe there are a number of sources of cash that we can tap into to address our short-term liquidity issues."

He added: "With that said, we can't provide any assurances that our efforts to address our liquidity situation will be successful and even if successful would be sufficient to address our liquidity problems."

Flyi's stock dropped 29.4 percent to an all-time low of 48 cents yesterday on the Nasdaq Stock Market. The market closed before the company had filed its quarterly statement. Under Nasdaq rules, Flyi could be delisted if its stock doesn't close at $1 a share or greater before Nov. 23.

The second-quarter results brought Flyi's total losses after four quarters of operation to $363.5 million. Before June 2004, Flyi was known as Atlantic Coast Airlines.

"As our earnings . . . indicate, we are suffering from many of the same problems that are affecting the rest of the industry, including the high price of fuel -- $63, $64 a barrel," Skeen said.

He also cited revenue shortfalls, created in part by the airline's less profitable West Coast flights, operated with narrow-body Airbus jets.

"Looking forward, it's hard to see any near-term relief on the horizon," Skeen said. "As a result, we have continued to reevaluate every aspect of our current operation . . . and nothing is off the table."

Skeen said Independence Air will cut its daily schedule to 342 departures from 403 this fall.