Kingfisher said in a statement late Friday that it would respond to the notice within 15 days and submit a "comprehensive plan for restoration of services after negotiations with our employees."
Flights have been grounded since Monday, as employees angry about not being paid for up to seven months refuse to work.
Authorities have been criticized for not acting earlier to protect passengers from flight cancellations and the hazards of stressed pilots and engineers who haven't been paid in months.
Civil Aviation Minister Ajit Singh said Friday that the carrier has passed all safety audits.
"From a safety point of view, there are no problems," he told India's NDTV.
The chairman of the State Bank of India, one of Kingfisher's main creditors, told reporters Friday that lenders have agreed to release 600 million rupees ($11.6 million) to help pay back salaries, after the income tax department unfroze the airline's bank accounts.
"The money that has been released by the tax authorities, 80 per cent of that will be made available to the company on humanitarian grounds, specifically to pay salaries of the employees," SBI chairman Pratip Chaudhuri told the Press Trust of India.
The Center for Asia Pacific Aviation, an airline industry research group, puts Kingfisher's outstanding debt at $2.5 billion, including about $1.1 billion in bank debt, and says its accumulated losses swelled to $1.9 billion by the end of June.
Kingfisher spokesman Prakash Mirpuri declined to comment on the release of funds.Suggest a correction