Revenue Sags at FLYi

The company's shares fell to 48 cents each.
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Struggling

FLYi Inc.

(FLYI)

, the parent of Independence Air, reported a wider second-quarter loss on sharply lower revenue and rising fuel costs.

In addition, the airline's cash position continued to worsen. The Dulles, Va., company, whose transformation last year into hip discounter from regional carrier proved poorly timed, said it lost $98.5 million, or $2.01 a share, in the second quarter. A year earlier, FLYi lost $27.1 million, or 60 cents a share.

The latest quarter's loss included a $43.4 million noncash charge as FLYi wrote down the value of its long-lived assets.

Revenue fell 24% to $117.4 million from $154.4 million in the year-earlier quarter. Fuel expenses rose 46% to $43.6 million from $30.0 million.

Independence Air's location on the East Coast puts it in a fiercely competitive market. It also struck out on its own -- its maiden flight as a discounter was in June of last year -- as fuel prices were marching skyward, hurting airline bottom lines. Before transforming its business, the company operated regional flights under contracts with large carriers like

Delta Air Lines

(DAL) - Get Report

.

FLYi's stock has sunk on expectations the company will file for bankruptcy protection. Shares fell 20 cents to 48 cents Tuesday.

FLYi said its load factor, or average percentage of seats filled, rose sequentially during each month of the second quarter, hitting 76.2% in June. Still, the quarter's overall load factor of 72.6% was lower than the 74.9% recorded a year before.

The company ended the quarter with $66.0 million in unrestricted cash, down from $106.9 million at the end of the first quarter. Restricted cash increased, however, to $69.5 million from $39.6 million.