A committee representing employees of Capitol Air has put together a plan that could provide the ailing carrier with $1 million in cash from a loan some time this week to help it keep operating.

The airline's management, meanwhile, has arranged with its insurance company in Britain to extend the insurance on its planes beyond midnight Saturday, when coverage was due to run out. Without insurance, the airline's six planes - four DC-8's and two Boeing 727-200's - would have been grounded.

An airline spokesman, Lou Garcia, said Friday that the Port Authority of New York and New Jersey had warned Capitol that it must pay $2 million in landing and airport fees by Nov. 23 or its lease at Kennedy International Airport would be terminated. Mr. Garcia said Capitol planned to meet that deadline and stay at the airport.

Some to Work Without Pay

About 400 Capitol employees at Kennedy voted Thursday night, in a show of hands, to work without pay for an indefinite time to help conserve the airline's cash.

In a consolidation move to save money, the airline is also preparing to move its headquarters from Smyrna, Tenn., to its Manhattan office.

Capitol's cash squeeze recently caused it to be late in meeting its payroll. The airline's loss in the first nine months of this year was $798,000, widened from $763,000 a year earlier. In the last three years, Capitol has gone through five different owners.

The plan for a $1 million loan to Capitol was put together in the last few days by Sam Mannino, chief executive officer of Century Financial Services of State College, Pa. Mr. Mannino said his company specializes in raising cash for financially struggling companies such as Capitol.

A Stock Ownership Plan

Capitol announced last Wednesday that a committee representing the airline's 800 employees had proposed a stock ownership plan under which the employees would buy 56 percent of the stock for $1.7 million.

Mr. Mannino said the employee committee had hired him to come up quickly with $1 million for the airline to use because its cash flow was not enough to cover its operating costs, raising the specter of bankruptcy.

After a quick audit of the company, Mr. Mannino said, he was able to find a group of investors to put up $1 million as a loan, with the company's fixed assets (such as aircraft parts, computers and office equipment) serving as collateral.

One major problem, he said, is the fact that the Internal Revenue Service already has liens on Capitol's fixed assets for nonpayment of Social Security withholding taxes totaling about $2.3 million.

Meeting With I.R.S. Is Set

Before Mr. Mannino turns over the $1 million to the airline, he said, he wants the I.R.S. to accept No. 2 status by letting his investors have first claim on the assets. A meeting between representatives of the employee committee and the I.R.S. is scheduled for Tuesday in Capitol's New York office to see if an agreement can be worked out, he said. The chairman of the five-member employee committee is James C. Rhodes, a pilot.

Mr. Mannino added that he would also ask that a new management team be appointed to run the airline during the transition. The new management, he said, would be picked by himself and the employee committee.

He also said that control of the money would be given to the employee committee and Menke Capital Partners, an advisory firm that is helping the employee committee with the buyout plan.

Close Watch Over Money

''We're not going to hand a check over,'' Mr. Mannino said, ''unless we know where the money is going.''

The main officers of the airline are Farhad Azima, chairman and chief executive officer, and John A. Catsimatidis, vice chairman. They own more than 50 percent of Capitol's stock. They were not available for comment because Mr. Azima was traveling and Mr. Catsimatidis was busy in meetings.

Once the employees control the airline, they would have to raise $5 million to $10 million within 60 days for working capital. This could be raised in the form of wage cuts.

Financial pressure on the airline is expected to grow. Some travel agents have begun to avoid booking passengers on Capitol. Also three major carriers - American, Eastern and USAir - have not renewed interline agreements with Capitol. This means they will no longer sell or handle tickets for Capitol flights.

A committee representing employees of Capitol Air has put together a plan that could provide the ailing carrier with $1 million in cash from a loan some time this week to help it keep operating.

The airline's management, meanwhile, has arranged with its insurance company in Britain to extend the insurance on its planes beyond midnight Saturday, when coverage was due to run out. Without insurance, the airline's six planes - four DC-8's and two Boeing 727-200's - would have been grounded.

An airline spokesman, Lou Garcia, said Friday that the Port Authority of New York and New Jersey had warned Capitol that it must pay $2 million in landing and airport fees by Nov. 23 or its lease at Kennedy International Airport would be terminated. Mr. Garcia said Capitol planned to meet that deadline and stay at the airport.

Some to Work Without Pay

About 400 Capitol employees at Kennedy voted Thursday night, in a show of hands, to work without pay for an indefinite time to help conserve the airline's cash.

In a consolidation move to save money, the airline is also preparing to move its headquarters from Smyrna, Tenn., to its Manhattan office.

Capitol's cash squeeze recently caused it to be late in meeting its payroll. The airline's loss in the first nine months of this year was $798,000, widened from $763,000 a year earlier. In the last three years, Capitol has gone through five different owners.

The plan for a $1 million loan to Capitol was put together in the last few days by Sam Mannino, chief executive officer of Century Financial Services of State College, Pa. Mr. Mannino said his company specializes in raising cash for financially struggling companies such as Capitol.

A Stock Ownership Plan

Capitol announced last Wednesday that a committee representing the airline's 800 employees had proposed a stock ownership plan under which the employees would buy 56 percent of the stock for $1.7 million.

Mr. Mannino said the employee committee had hired him to come up quickly with $1 million for the airline to use because its cash flow was not enough to cover its operating costs, raising the specter of bankruptcy.

After a quick audit of the company, Mr. Mannino said, he was able to find a group of investors to put up $1 million as a loan, with the company's fixed assets (such as aircraft parts, computers and office equipment) serving as collateral.

One major problem, he said, is the fact that the Internal Revenue Service already has liens on Capitol's fixed assets for nonpayment of Social Security withholding taxes totaling about $2.3 million.

Meeting With I.R.S. Is Set

Before Mr. Mannino turns over the $1 million to the airline, he said, he wants the I.R.S. to accept No. 2 status by letting his investors have first claim on the assets. A meeting between representatives of the employee committee and the I.R.S. is scheduled for Tuesday in Capitol's New York office to see if an agreement can be worked out, he said. The chairman of the five-member employee committee is James C. Rhodes, a pilot.

Mr. Mannino added that he would also ask that a new management team be appointed to run the airline during the transition. The new management, he said, would be picked by himself and the employee committee.

He also said that control of the money would be given to the employee committee and Menke Capital Partners, an advisory firm that is helping the employee committee with the buyout plan.

Close Watch Over Money

''We're not going to hand a check over,'' Mr. Mannino said, ''unless we know where the money is going.''

The main officers of the airline are Farhad Azima, chairman and chief executive officer, and John A. Catsimatidis, vice chairman. They own more than 50 percent of Capitol's stock. They were not available for comment because Mr. Azima was traveling and Mr. Catsimatidis was busy in meetings.

Once the employees control the airline, they would have to raise $5 million to $10 million within 60 days for working capital. This could be raised in the form of wage cuts.

Financial pressure on the airline is expected to grow. Some travel agents have begun to avoid booking passengers on Capitol. Also three major carriers - American, Eastern and USAir - have not renewed interline agreements with Capitol. This means they will no longer sell or handle tickets for Capitol flights.