Kingfisher Airlines' air operator's certificate has been suspended by the Indian regulators after the carrier failed to convince them of its ability to resume its grounded operations.
The suspension remains in place until the airline submits a "concrete and reliable revival plan" which ensures that it can carry out "safe, reliable, efficient and sustainable air transport services", says India's directorate general of civil aviation (DGCA).
Kingfisher grounded its fleet of two aircraft, down from around 60 widebodies and narrowbodies at its peak two years ago, on 1 October after several employees went on strike after not being paid for several months.
It had been operating only domestic services since March, when it cancelled international operations after defaulting on lease payments for aircraft.
The DGCA issued a show cause notice after the grounding, and asked the airline to provide a concrete plan by 20 October on how it will restart operations. The airline said on 19 October that it needed more time to resolve the impasse with its employees, but this was not "satisfactory", says the regulator.
"DGCA has observed that Kingfisher Airlines has not addressed any of the issues raised by the DGCA during the meeting held with the airline on 2 October 2012, and the points raised in the show cause notice," says the agency.
"They were asked to submit their operational preparedness plan for resumption of flight operations. Instead they have sought more time to file a reply to the show cause notice, not indicating any time frame for submitting the detailed response. Therefore, the request could not be acceded to by the DGCA."
Kingfisher points out in a statement that its AOC has only been suspended and not cancelled. It adds that it still hopes to resume operations after resolving its problems.
"The actual position has not changed because of this order. We have in any case always maintained that once the issues with the employees are resolved, we will first present our resumption plan to DGCA for review, before resuming operations," says the airline.
"It is our endeavour to re-start operations at the earliest and we assure you we are working towards achieving this."
Kingfisher has never made a profit since it began services in 2005 and is estimated to have reported cumulative losses of Indian rupee (Rs) 70 billion ($1.32 billion).