Reacting to the airline's reply, official sources said the Directorate General of Civil Aviation (DGCA) was consulting legal experts on what action - suspension or cancellation of flying licence - could be taken against Kingfisher for failing to resolve the 21-day impasse with its employees over non-payment of seven-month salary dues and resuming operations.
"We will take a view on this very soon... probably within a couple of days," a source said, replying in affirmative when asked whether suspension was on the cards.
Among the options could be suspension of flying licence or give them some more time.
The DGCA had issued show-cause notice on October 5, to the liquor baron Vijay Mallya-owned airline asking why its flying licence should not be suspended or cancelled as it was not adhering to its flight schedule and "abruptly cancelling its flights time and again during the last 10 months", causing great inconvenience to the travelling public.
The DGCA had given the airline a 15-day time to reply to its notice, which was to expire on Saturday.
Later the airline issued a statement saying it had "extended the partial lockout until October 23, 2012. We had a positive meeting with employee representatives on October 17 and are hopeful of reaching common ground when we meet again next week."
"Currently, we anticipate resuming operations on November 6, subject to our resumption plan being reviewed and approved by the DGCA."
The official sources made it clear that Kingfisher could not resume operations till the DGCA gave the final clearance.
The beleaguered carrier did not mention extension of the lockout in their "open-ended" reply to DGCA, they said, adding that the airline, in its letter, sought more time to prepare a response to the DGCA notice but did not give any deadline.
Kingfisher was issued an airline licence on August 26, 2003. It was actually issued to Air Deccan which was bought over by Kingfisher. It is valid till December 31 this year.
Suspension of flying licence, which is generally until further orders, would entail immediate halt to all bookings on the entire Kingfisher network as well as through travel agents, the sources said.
Whenever the airline approaches DGCA that they were ready to resume operations, the regulator would satisfy itself that the airline was fully prepared to fly, including preparedness of the staff to operate flights, the airline's capacity to pay for the operations and all safety measures.
In case of cancellation of the licence, the airline would have to start afresh, apply to the ministry for a licence and complete the entire long-drawn official, legal and technical processes and get all regulatory approvals.
In its reply, the airline blamed industrial unrest for not being able to operate its flights. It also claimed its good safety record and on-time performance over the years and welcomed government's decision to allow foreign airlines to pick up stake in Indian carriers.
In the final paragraph, Kingfisher's Executive Vice President Hitesh Patel said the company needed more time to give a proper reply to the DGCA show-cause notice and sought permission to appear in person to respond to other queries by the regulator. But it did not give any time-line.
The sources said Kingfisher was on cash and carry by most service providers and the government did not want a situation where the airline re-starts operations and then keeps flying in fits and starts, as has been happening since last year-end.
In the latest instance, its pilots and engineers went on strike from September 30 to protest against non-payment of salary since March. The airline then declared a lockout on first till October 4 and then extended it till October 20. It as further extended till October 23 on Friday.