When contacted, Jet Airways denied having received any such ultimatum from pilots.
The threat comes a day ahead of the airlines' annual general meeting and announcement of first quarter earnings on Monday. The AGM will be attended by chairman Naresh Goyal and Etihad chief executive and president James Hogan.
Jet Airways, in which the Gulf carrier Etihad had invested Rs 2,058 crore for 24 per cent stake, has 1,100 pilots on the roll. Its pilots have struck work for weeks in 2009 against sacking of two of their colleagues.
"The pending arrears have not been paid even after the management saying at every meeting that they would be paid. During the past 15 months, we have had four chief executives and each one of them had asked us to be patient.
"But this time around, we are not going to be cajoled by them any more and if they don't give us a firm date to clear the arrears running into Rs 90-100 crore by August 20, we will be forced to resort to industrial action," a senior Jet Airways source told PTI.
The airline has been appraised of this decision during a recent meeting, the source added.
"There is no such ultimatum that has been received," a Jet Airways spokesperson said.
Of the 1,100 pilots on the rolls, as many as 600 are commanders and the rest first officers.
"Jet Airways owes around Rs 15 lakh to each commander and another Rs 7 lakh to each co-pilot. At the time of taking Etihad on board, the management had shown us a rosy picture going forward, but that remains to be translated into reality," the source said.
The arrears pertain to the fiscals 2010-11 and 2011-12, the source said, adding that "arrears for FY 2013 have have been paid".
The Mumbai-headquartered airline promoted by Naresh Goyal had reported its highest ever quarterly loss of a Rs 2,153.57 crore in March 2014. It will announce the first quarter earnings on Monday.
Late last month, Jet and Etihad had announced a major new turnaround strategy to bring back profitability in three years. The three-year plan, approved by the board some time back, includes a series of critical measures, such as long-term network, fleet and product developments to optimise the airline's domestic and international operations among other measures.