Financial services company Moody's has revoked its credit rating for freighter operator Western Global Airlines, and reports indicate that the business may be considering bankruptcy.

Bloomberg reported citing anonymous sources, that the Florida-based airline is "considering whether to file for bankruptcy protection" amid liquidity problems. It added that conversations with creditors were ongoing but that no final decision had been taken.

Meanwhile, Moody's withdrew the carrier's Caa1 corporate family rating (CFR) and Caa2 senior unsecured rating last week.

"The ratings are no longer on review for downgrade, and the outlook of ratings under review has been withdrawn," the financial company said. "Moody's has decided to withdraw the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings."

Moody's already earlier in 2023 downgraded Western Global's ratings from B2 and B3, citing a liquidity crunch.

It said that the company's US$47.5 million revolving credit facility, expiring February 15 2025, "will likely remain fully utilised even after the company receives a return of certain deposits associated with its now aborted agreement to purchase two 777F aircraft" from Boeing.

Moody's added in its March rating review that "all of Western Global'd assets are encumbered, limiting its ability to raise new funding on favourable terms."

"Additionally, declining operating block hours in recent quarters have contributed to weakness in Western Global’s revenues and cash flow," Moody's added.

Fitch also revoked its credit ratings for Western Global's unsecured debt, saying that the company is no longer providing adequate information to support a rating determination.

The Estero, Florida-headquartered carrier, was grouped in a category of corporate debt issues that are considered speculative grade and high risk.

"The downgrade is driven by further increases in liquidity and refinance risks given low aircraft activity with large parts of WGA's fleet either stored or parked and limited flights to and from Asia."

"The downgrade also reflects the continued deterioration of capital markets access with WGA's unsecured bonds currently trading at distressed levels," the report said.