FLYi

,

, parent of struggling low-cost airline Independence Air, will be tardy paying interest on its debt.

The Dulles, Va.-based company said it has decided not to make Feb. 15 interest payments on 6% convertible notes that come due in 2034. It attributed the decision to its ongoing efforts to restructure contracts with its aircraft lenders and lessors.

Shares fell 12 cents, or 8.5%, to $1.30 following the announcement.

FLYi still has another 30 days after that to pay the interest before it defaults. It expects to pay the debt within that period, but only if it is successful in negotiations with its aircraft lenders.

Last week, FLYi disclosed that a lender on one of its regional jets had declined to negotiate a restructuring. On Jan. 27, the lender filed a lawsuit seeking to terminate the lease, repossess the plane and collect damages.

The company is attempting to free itself from its past as an operator of regional flights for network carriers and emerge as a successful discount airline.

But Independence's maiden flight last June couldn't have been more ill-timed. Jet fuel prices skyrocketed while a glut of capacity made it hard for carriers to raise fares.