Mallya, who had a meeting with the employees including pilots and engineers late last night, had assured them that their dues would be paid in a staggered manner by April 10.
"The employees accepted the assurance Mallya had given in his letter and decided that they would not go ahead with their ultimatum of an agitation if a part of their dues were not paid by 8 PM today,’’ airline sources said.
After a day-long meeting between the employees and the management yesterday, Mallya made a last ditch effort and met the agitators at his residence late last night.
He is understood to have warned them that any agitation could lead to cancellation of Kingfisher's flying permit by aviation regulator DGCA if its services were disrupted any further.
The crisis-ridden carrier was in any case operating a curtailed summer schedule of about 100 daily flights with 16 planes.
Urging the employees not to press their ultimatum, Mallya reiterated his promise of clearing the salary dues of junior staff, including those involved in ground handling and security, by tomorrow and that of the pilots and engineers by April nine and ten. The staffers have not been paid salaries since December.
Yesterday, several pilots and staff of Kingfisher had not reported for duty to protest the continued delay in payment of salaries leading to cancellation of at least ten flights including those from Delhi and Mumbai.
The troubled carrier's employees had put the airline on notice asking it to pay two months' salaries and dues by 8 PM today and the rest by April 20.
Mallya, in a letter to his employees, had conveyed that the formalities of un-freezing the airline's bank accounts was completed on March 31 after it paid Rs 44 crore to the Income Tax and Rs 20 crore to the Service Tax authorities.
"My only focus now is to start paying your seriously overdue salaries. All junior staff will be paid before the Easter that is on April 4th. All pilots and engineers will be paid on April 9th and April 10th," Mallya had said.
He had also told the employees that starting this week, he would be personally available at each major station for one day a week to listen to the concerns of all staff.
Kingfisher has massively cut down its operations, including shutting down many domestic sectors and completely discontinuing international operations. From 400 flights a day before the crisis last November, it is operating just about 100 flights now.
The airline, which has a debt of USD 1.3 billion, is under pressure from its lenders to inject fresh equity. The debt-laden carrier terminated operations to 28 of its 56 destinations, including Hyderabad and Kolkata, over the past few days and asked about 40-50 per cent of its staff to stay at home till further orders.