The country's aviation regulator has given Kingfisher Airlines time till Monday to come back to it with safety measures after warning that financial problems could affect the carrier's safety standards.
The Director General of Civil Aviation (DGCA) met executives from Kingfisher and Air India Express, the budget arm of state carrier Air India on Thursday, seeking an explanation on safety concerns highlighted by the regulator's internal report. The regulator announced no airline will be shut down.
Earlier on Thursday, a newspaper report, citing the regulator's report, said that a reasonable case exists for withdrawal of Kingfisher's licence as its financial stress is likely to impinge on the safety of passengers.
Kingfisher, controlled by flamboyant liquor baron Vijay Mallya, is facing rough weather after it cut flights late last year and ground aircraft to offset a cash crunch.
Bharat Bhushan, director general of civil aviation, said as many as one-third of a carrier's fleet were on ground, which the newspaper report identified as Kingfisher.
"So they can't ask for slots, occupy everything and cancel things, and put people to inconvenience. How are they doing the regular maintenance and all those things, we propose to look at."
Kingfisher, reacting to the report, said that it was operating flights with "utmost safety" and would respond to the questions raised by the regulator at the meeting.
"This is an audit which the DGCA carried out (which they can carry out on any airline) following which it has submitted a list of questions to us which we are going to reply to, at the meeting today," a Kingfisher spokesman said.
An Air India spokesman was not immediately available for comment.