India's debt-crippled Kingfisher Airlines cancelled 41 scheduled flights on Saturday, after some staff did not report for work in response to the company failing to pay their salaries.
The airline, which is under immense pressure from lenders to work out a turnaround plan, said 75 percent of its employees received their salaries by Friday as promised, while the rest will be paid by Monday.
Kingfisher, which had debt of USD$1.4 billion at the end of March, had said it would operate around 120 daily flights with 20 aircraft.
"This only makes my recapitalisation efforts more difficult by causing concern and apprehension among our potential investors," Kingfisher's chairman Vijay Mallya said in an email sent to employees on Saturday.
Kingfisher has never made a profit. Its share of India's domestic airline industry has fallen from second to last among the six big carriers after it was forced to ground most of its fleet.