Kingfisher airlines has had its licence suspended by Indian aviation authorities, nearly three weeks after it had to cancel its own operations due to a staff revolt.
The director-general of civil aviation said the licence would remain suspended until the Indian carrier could present a convincing financial plan for its long-term future, including how it would pay staff that have not received salaries for seven months.
Critics had accused the government of going soft on Kingfisher because of huge exposure by government-owned banks to the debt-laden carrier, reports the Financial Times.
It is unlikely the licence will be completely withdrawn from the airline, which is reportedly $1.4bn in debt and has never made a profit.
The Indian airline, which had suspended operations until 6 November, said "the actual position is not changed because of this order", although it said it will stop taking reservations for future flights.
Last week an arrest warrant was issued for Vijay Mallya, the owner of Kingfisher Airlines, after he failed to adhere to a court summons over bounced cheques, see previous story.
By Diane Evans
