Low-cost airline Independence Air, which is controlled by FLYi, is under pressure to boost revenues and cut cuts to avoid a "liquidity crisis," it said in a regulatory filing.

Faced with fierce competition and record fuel prices, Independence Air has seen revenue "falling significantly below anticipated levels and the company expending cash at an unsustainable rate," the company said in the filing with the Securities and Exchange Commission made late on Wednesday.

Dulles, Virginia-based Independence said in the filing that it had pledged nearly all of its assets in a recently completed restructuring, risking a cash shortfall if passenger traffic remains weak and fuel costs remain at their current record high levels.

FLYi's shares have plunged 62 percent over the last six months.

The airline in January missed an interest payment on some of its bonds, prompting speculation it was close to filing for bankruptcy protection.

Soon after, it won breathing room through a deal with General Electric to terminate leases on 10 regional aircraft in return for additional financing, though it warned at the time there was no assurance it would be able to resolve its liquidity issues.

Independence used to be a feeder airline for several larger carriers, but last year it severed those ties, electing instead to market flights and ticket passengers on its own.