The operational certificate of Bolivia's Aerosur was not renewed by the local regulator DGAC (CAA) after it expired on 12 July.
Vladimir Sanchez, Bolivia's minister of public works, which includes CAA, said that the airline's "documentation submitted for the renewal process was outdated," at a tourism event during the past weekend. Aerosur now has a week to correct any errors in the documentation in order to renew its operational certificate.
The carrier stopped flying in May after abandoning a number of destinations starting with Madrid in late March.
Aerosur's relaunch appears increasingly unlikely after local authorities rejected three versions of a rescue plan presented with the backing of US mining sector investor Franklin Petty. They cited a lack of clear provisions on how the carrier would pay for its historic debt load.
While Sanchez had initially quantified Aerosur's debt of being in the range of $300 million, a study by the ministry found that total debt is $454.11 million.
Should Aerosur recover its operational certificate by correcting the formal shortcomings, it would be able to resume flights only until 12 September before facing the definite withdrawal of its AOC.
Aerosur's employees unions have accused the Bolivian government repeatedly of favouring state owned Boliviana de Aviacion (BoA) in its dealings with the carrier.
BoA had to delay the launch of flights to Madrid, which were previously announced for June, because the traffic rights of Aerosur, which is the designated carrier on the route, remain inaccessible while the airline's route authorities remain active.