Mumbai, Apr 2 (Reuters): Kingfisher Airlines will resume payment of staff salaries starting from this week after tax authorities unfroze its bank accounts, the airline's chairman and managing director, Vijay Mallya, said in a letter to employees.

Kingfisher's bank accounts were frozen by India's tax authorities in February which restricted the carrier's ability to make salary and other payments to ensure smooth running of its daily operations, resulting in the grounding of several flights.

The bank accounts were unfrozen on Sunday after the airline paid a total of 640 million rupees to various tax authorities before March 31, Mallya said.

The carrier's junior staff will be paid on Wednesday, while all pilots and engineers will be paid on Apr. 9 and Apr. 10, Mallya told employees.
"My only focus now is to start paying your seriously overdue salaries," said Mallya.

Kingfisher owes $1.3 billion to banks, including the State Bank of India and ICICI Bank.

Mallya is under pressure from his airline's lenders to inject equity into Kingfisher, which has debt of $1.3 billion and has slashed its flight schedule and grounded most of its fleet.

ICICI Bank has asked the embattled airline to top up its loan security or adjust the loan amount after the ailing carrier's stock was pounded in recent weeks.

JP Morgan said last week that pricing power has come back to Indian airlines, but rising oil prices and a weakening rupee will continue to hurt profitability of carriers.

"Going forward, we only see limited aircraft additions, driven mainly by low-cost carriers. Against this backdrop, airlines have been able to raise fares by 10-12 percent in Mar-12," it said.