Kingfisher is already reeling from $1.4 billion of debt and scrambling for funds after defaulting on payments to banks, airports and tax authorities.

A Kingfisher spokesman did not immediately respond to a request for comments.

The airline last week said its planes, grounded since the start of the month after an employee protest turned violent, would not fly until October 20. It has never made money since its founding in 2005.

The ailing airline is seven months behind in salary payments. The protests started last month when a group of engineers refused to certify the airworthiness of planes.

Chief Executive Sanjay Aggarwal said a Wednesday meeting with employees had made progress and there would be another meeting in the next few days.

"At this point of time, it definitely looks like we will have to extend the restart of the operations," he told reporters.

Aggarwal did not specify when he expected flights to resume.

"The talks are positive. We will have to meet again... Our primary agenda is our seven month salary," said a Kingfisher engineer who attended the meeting but declined to be identified.

Separately, the country's civil aviation regulator did not approve Kingfisher's proposed winter schedule of Kingfisher's flights. The company had 2,930 departures per week last year in its winter schedule, which starts this year on October 28.

Earlier this month the Directorate General of Civil Aviation sent a "show-cause" notice to Kingfisher asking why its licence to fly should not be cancelled after failing to provide a "safe, efficient and reliable service".

Kingfisher was given 15 days to reply, but sources have said that the regulator is open to give it more time to come up with a response.

(Reporting by Anurag Kotoky and Indulal P.M.; Editing by Mike Nesbit)

• A Permanent Economic Emergency