The Indonesian Ministry of Transport has suspended the Air Operating Certificate of carrier Sabang Merauke Raya Air Charter following a crash involving its aircraft last month.
A Casa 212-100 operated by the carrier crashed on 12 February in Bintan island while it was conducting a test flight from the neighbouring island of Batam.
The airline's AOC has been suspended for an unspecified period.
An report from the ministry's Directorate General of Civil Aviation (DGCA) says that the airline did not obtain official permission to conduct the test flight and its pilots did not have the necessary qualifications to conduct test flights.
The report adds that a spare engine was found among the aircraft debris after the crash and a special safety audit will be conducted. It does not say when the audit will be conducted.
Reports quoting the airline's president director, Budi Tetuko, say that the airline is working on preventive actions and revamping its internal safety operations and procedures as recommended by the DGCA.
The airline's management hopes to resume operations as soon as possible, he was quoted as saying.