Chief Executive Sanjay Aggarwal told reporters on Monday he was optimistic employees would back the proposal and he expected a decision in a day or two.

Kingfisher, controlled by the flamboyant Vijay Mallya, has never made a profit since it was founded in 2004 and is reeling under $1.4 billion debt. Its fleet has been grounded since the start of the month when a staff protest turned violent.

"It's a fair deal and hopefully all employees will accept the proposal," said Vikrant Patkar, a striking pilot at Kingfisher, who was part of the negotiations with the management. "We will soon be back in the sky if (it) works out."

However, even if Kingfisher gets employees back on board, it still has to convince the Indian regulator to restore its licence, which was suspended on Saturday after it failed to address concerns regarding safety.

The airline plans to meet the Directorate General of Civil Aviation with a revival plan in the "near future", Aggarwal said, while declining to give a more specific time frame.

It will also likely meet its lenders by end of this month to discuss a turnaround plan.

The lenders, mostly government banks led by State Bank of India (SBI.NS), have refused to extend further credit in the absence of fresh equity, but they have shown patience. Indian state banks rarely force big companies to liquidate.

Kingfisher is in talks with a couple of airlines for investment to help revive operations.

Last month, India allowed foreign airlines to buy stakes of up to 49 percent in local carriers, a long-awaited policy move lobbied for by Kingfisher and seen as providing a lifeline to the country's debt-laden operators.

"We are continuing discussions on recapitalisation. Those discussions slowed down but they are not stalled," Aggarwal said. "We are committed to clear the (salary) arrears once we are recapitalised."

The Centre for Asia Pacific Aviation has said a fully funded turnaround for Kingfisher would cost at least $1 billion. (Reporting by Prashant Mehra and Kaustubh Kulkarni; Writing and additional reporting by Swati Pandey; Editing by Mark Potter)

• A Permanent Economic Emergency