"We have sent a notice to the airline to stop bookings," a top official of the Directorate General of Civil Aviation (DGCA) said in New Delhi.
Soon after Kingfisher extended its lockout till October 12, travel agents said ticket sale had resumed for flights starting this weekend.
The lockout was declared after a strike by engineers and pilots over delay in payment of salaries.
The airline got some reprieve as bankers agreed to release funds of up to Rs. 60 crore from escrow accounts for the carrier to make salary payments.
But employees said they have not received any payment so far.
On October 5, DGCA issued a show-cause notice to the Vijay Mallya-owned carrier asking why its flying license should not be suspended or cancelled as it had grounded its entire fleet and failed to offer safe, efficient and reliable service.
It has given the airline 15 days to reply.
Civil aviation minister Ajit Singh also said the airline would have to submit a concrete plan to DGCA on safety and payment of salaries, before it is allowed to resume flights.
Kingfisher has been saddled with a loss of Rs. 8,000 crore and a debt burden of another over Rs. 7,000 crore, a large part of which it has not serviced since January.
Meanwhile, Kingfisher pilots, engineers and some other staff staged a protest demonstration here to demand early payment of their seven month dues, blaming the airline management for "not listening to our problems. We are ready to talk but have not received any response".
Asked whether they planned to intensify their agitation, an engineer said they would decide on the future course of action in the next few days.