Troubled Kingfisher Airlines may risk losing a large number of its prime flying slots as it began operating a truncated flight schedule on Thursday, with DGCA considering punitive action against it for allegedly flouting regulations.

There was still no clarity on what the 13-banks consortium has decided regarding fresh fund infusion into the financially-distressed carrier. On its part, Government adopted a wait-and-watch approach.

"If the banks find it good business, they will loan their money (to Kingfisher). .... At the same time, the government is not going to ask banks to loan money to any private industry. Its for the banks to decide ... on the basis of whether they will get it back or not," Civil Aviation Minister Ajit Singh told reporters here.

Highly-placed sources said the airline was likely to lose its flying slots as it put into operation a schedule of about 170 daily flights with 28 aircraft.

Kingfisher had earlier sought DGCA's permission for 400 daily flights with 64 planes for the winter schedule for the Ocotber-March period.

In November last year, it surrendered almost half its slots after cancelling around 200 daily flights on the same grounds of financial crisis.

The ailing carrier has now cancelled between 30-60 daily flights out of 240 since February 17 after tax authorities froze its bank accounts over unpaid service tax.

Under Rule 140(A) of the Aircraft Rules, 1937, airlines need prior approval of DGCA to curtail their flight schedules.

Any violation can amount to cancellation of the flight permit of an airline, as an extreme measure.

As the Directorate General of Civil Aviation (DGCA) examined its operational details to consider punitive action, the sources said a decision on the slots is likely to be taken next week in consultation with the Airports Authority of India (AAI) which manages them.