Air Sweden has lost its appeal over last year's grounding by the Swedish transport regulator.
Sweden's administrative court ruled on 4 January that Transport Styrelsen's decision to revoke the carrier's commerical operating licence was justified, the regulator said.
Transport Styrelsen revoked the licence in April 2011 following concerns about Air Sweden's ability to comply with European Commission regulations.
The Stockholm Arlanda-based carrier later filed for bankruptcy protection.
The administrative court put the operating ban on hold while it heard Air Sweden's appeal. However, Transport Styrelsen said the carrier had not been operating any flights "for a long time".
Air Sweden received its operating licence in December 2009.
The airline could not immediately be reached for comment.