The country’s Department of Civil Aviation (DCA) said it was revoking Rayani Air’s certification because of concerns over its safety audit and administration.
Launched in December 2015, Rayani Air offers only halal food, no alcohol and crew wearing modest clothing.
The airline has two Boeing 737-400 planes in its fleet, each able to carry about 180 passengers, eight pilots and 50 crew.
The DCA said on June 13 that Rayani Air could no longer operate as a commercial airline.
It follows a three month suspension after Rayani Air failed to follow flight regulations. A safety audit was later conducted to assess its operations.
Malaysia’s aviation commission said in a statement that Rayani Air “had breached the conditions of its Air Service Licence [ASL] and lacks the financial and management capacity to continue operating as a commercial airline”.
The DCA said it had conducted a “thorough deliberation” on Rayani Air’s response to the safety audit.
In the lead up to its suspension, Rayani Air had faced criticism including complaints about cancelled flights as pilots went on strike.
Based on the island of Langkawi, Rayani Air had been flying to the capital, Kuala Lumpur, and the northern city of Kota Bahru.
Rayani Air had plans to fly to more Malaysian cities and eventually schedule flights to Mecca for the Hajj and Umrah pilgrimages, reports said.
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