Mallya is friends with some of India's top politicians and has clout, which may have helped the airline sputter on for as long as it has. Kingfisher's bank consortium consists mainly of state lenders led by State Bank of India.
However, the patience of India's regulators has been running thin since Kingfisher began slashing flight schedules late last year, disrupting the travel plans of thousands. Meanwhile, the government has an in-built conflict of interest as both the airline's regulator and owner of ailing rival, Air India.
"Vijay Mallya has to convince DGCA (directorate general of civil aviation) that he is in a position to operate an airline ... The onus is on him," minister Ajit Singh said on Tuesday.
In one glimmer of good news, Mallya said on Tuesday that the authorities had unfrozen some of the airline's bank accounts in Bangalore, where it is based, but gave no details.