Kingfisher Airline's license to operate was suspended on Saturday after the debt-laden carrier failed to satisfy the aviation regulator's concerns about its operations.
Struggling to pay bills, Kingfisher is seven months behind on salary payments, and its fleet has been grounded since the start of the month after a staff protest turned violent.
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It has been suspended until further notice, Arun Mishra, director general of Civil Aviation told Reuters.
The regulator had asked the carrier why its license to fly should not be canceled for failing to provide a "safe, efficient and reliable service".
(Reporting by Anurag Kotoky; Editing by Dan Lalor)