Barely a year ago, privately owned Kingfisher Airlines was the second-largest carrier in India. Today, its entire fleet is grounded and it is close to losing its air operator certificate.

Labor unrest over unpaid salaries forced a shutdown of Kingfisher’s daily operations from Oct. 1, and talks between the airline’s management, headed by owner Vijay Mallya, and striking engineers and pilots continue without resolution.

“We will have to look at extending the lockout for a few more days . . . The meeting with the representatives of pilots and engineers was very good. The discussions are moving in the right direction . . . But we will be meeting again shortly,” says airline CEO Sanjay Agarwal Oct. 17.

The debt-ridden airline offered to pay one month’s salary immediately and expedite payment of the remaining six months as soon as the company is recapitalized, but the labor groups rejected the offer. “Our strike will continue, as the management has failed to give any commitment on payment of our salary,” says Vikrant Patkar, a pilot who represents engineers as well as his own work group.

Nearly 300 pilots have stayed away from work since Oct. 1, protesting the non-payment of salaries from March 1.

“There is no money, and they also can’t give any commitment as well . . . We are not going to work unless we are paid for the last seven months. So we have rejected their offer,” Pathak says.

Indian Civil Aviation Minister Ajit Singh says he may revoke the airline’s operator certificate. Under the rules set by the regulator Director General of Civil Aviation (DGCA), an airline must operate at least five aircraft to retain its status as a scheduled carrier. Kingfisher was operating about 10 aircraft of a fleet that numbered 64 before the shutdown.

The airline “will not be allowed” to fly until the engineers “approve and certify the airworthiness of the aircraft,” the minister says. “Passenger safety cannot be compromised. If there is a safety issue with Kingfisher, we will close it down,” he adds.

According to the rules of the DGCA, flights are not allowed to operate unless declared fit to fly by engineers. The DGCA says it is “very concerned about the situation” and “ready to talk” to Kingfisher employees if they are not satisfied with the airline’s plan.