Aviation authorities are meeting with Kingfisher Airlines and another of India's largest carriers today after an internal report raised safety fears.
India's director general of civil aviation Bharat Bhushan told The Times of India that Kingfisher Airlines and Air India's budget carrier Air India Express needed to take "several steps".
The report said there was "a reasonable case" for withdrawing Kingfisher's licence if regulators believed its well-publicised financial difficulties were affecting the safety of its operations. It also said there was a case for restricting Air India Express' operations in view of safety issues.
Both carriers have defended their safety standards. Kingfisher, which is owned by liquor baron Vijay Mallya, said it was operating with "utmost safety".
A Kingfisher spokesman told the news agency AFP: "This is an audit which the DGCA carried out… [which] we are going to reply to at the meeting today (Thursday)."
According to one report, the audit found that of 20 of Kingfisher's 61 aircraft have been permanently parked at Indira Gandhi International airport due to poor maintenance. As a result, there have been more than 170 flights cancellations in a month.
The audit also found "major financial distress issues" with Jet Airways, JetLite, SpiceJet and GoAir, according to reports.
Most airlines in India, including the largest, Jet Airways, are loss making. According to Reuters news agency, they are on course to lose $20bn in the current financial year due to high fuel prices and on ongoing price war combined with a slowdown in the economy.
Kingfisher and Air India have been negotiating with banks for further cushion to ease their debt burden and for more working capital. Both firms have undergone debt restructuring and in September Kingfisher shut its budget arm Kingfisher Red, saying it no longer wanted to compete in the low-cost market.
Kingfisher, which flies from London to Delhi and Mumbai, will join the oneworld airline alliance on February 10.
By Linsey McNeill
