After talks between the two sides in Mumbai which lasted over four hours, airline CEO Sanjay Aggarwal told reporters, "We had a fruitful discussion. We have given time to the employees to consider the proposal that we will clear three months' salary dues by Diwali (November 13)."
He also said that the lockout, which is till tomorrow, is being extended till normalcy is restored.
Aggarwal said the airline would "very shortly" submit a comprehensive and detailed revival plan to aviation regulator DGCA for its approval.
"It is a fair deal. But we will discuss it with all employees and get back to the management by Thursday," an engineer, who attended the parleys, told reporters.
The operations of Kingfisher have remained disrupted since September 30, first due to a strike by its engineers and pilots, then by the lockout declared by the management which was followed by suspension of its flying permit by DGCA.
Under the deal offered by the management, the salary dues of one month would be paid in 24 hours, another month's instalment in seven days and the third instalment before Diwali on November 13, airline sources said, adding that efforts would be made to clear fourth instalment by December.
Even if all employees resume duty, the airline would take about a month to launch its operations after getting all clearances from the regulator, the sources said.
They also said the management is likely to send out an e-mail to all staffers tonight or tomorrow promising to clear their dues gradually and appealing to them to return to work.
The employees, including pilots and engineers, have not been paid for the last seven months.
The agitating staff have already planned to hold demonstrations and other protest actions, especially during the upcoming Formula One motor race in which UB Group chief and Kingfisher promoter Vijay Mallya is involved.
To questions on recapitalisation plans, the Kingfisher CEO said the plan was "on the right track. In such a situation (faced with a strike, lockout and suspension of licence), there is bound to be some slowdown, but it is on track".
He, however, refused to divulge details about how the funding was being organised for clearing of the salary dues.
Aggarwal expressed hope that "all employees will accept our proposal. The representatives will discuss the proposal with the and get back to us by Thursday".
Airline sources said the management would issue an appeal to all employees with the offer by tomorrow following insistence by their representatives on a written assurance alleging that the management had earlier backtracked.
The airline is saddled with a loss of Rs 8,000 crore and a debt burden of another over Rs 7,524 crore, a large part of which has not been serviced since January. It currently has only 10 operational aircraft compared to 66 a year ago.
The meeting was the first after Kingfisher's flying was suspended by DGCA last Friday following its failure to come up with a viable plan of financial and operational revival.
Noting that the airline had not addressed any issue raised in its show-cause notice of October 5 and in meetings with top officials, DGCA suspended its Scheduled Operator's Permit till such time Kingfisher submitted "a concrete and reliable revival plan ensuring safe, reliable, efficient and sustainable Scheduled Air Transport Services to the satisfaction of DGCA".
Suspension of flying licence led to an immediate halt to all flying operations, which in any case were grounded since October 1 when the lockout was declared. It also resulted in stoppage of all ticket bookings on the entire network as well as through travel agents.
Kingfisher was issued an airline licence on August 26, 2003, which is valid till December 31.