Aircraft lessors have approached the civil aviation regulator, Directorate General of Civil Aviation (DGCA), asking it to deregister their three planes loaned to Air Pegasus after the airline defaulted on rental payment.
The Bengaluru-based airline, which is facing severe fund crunch, has already suspended operations indefinitely, DGCA sources said.
The airline has not been carrying out operations since Wednesday.
"We have received an application from the lessors seeking deregistration of three ATR-72 plane with Air Pegasus," a source said.
The application is being processed, it said, adding that of the three aircraft, one is already out of operation for quite sometime.
The deregistration will enable the lessors to take the aircraft out of the country after repossessing them.
Air Pegasus Managing Director Shyson Thomas did not respond to calls.
The carrier, which was launched in April 2015, operates flights from Bengaluru to Chennai, Cuddapah, Hubli, Madurai, Mangalore, Puducherry, and Trivandrum in South India, as per latest data available with the DGCA.
Recently, DGCA has suspended five Air Pegasus pilots for serious safety violations.
The civil aviation regulator had also warned that the airline would not be allowed to fly on new routes unless the lapses were addressed at the earliest.
At that time, a senior Air Pegasus official had said that the issues raised by the regulator had been addressed.
A safety audit of Air Pegasus, conducted in late April, showed serious violations safety rules in some of its flights.