Thailand's aviation safety rating was downgraded Tuesday by the United States the second such setback after the UN's "red flag" issued by the International Civil Aviation Organisation (ICAO).
The Federal Aviation Administration (FAA) demoted Thailand's safety standard status to Category II.
This was issued in June for "significant safety concerns" raised after the now-defunct Department of Civil Aviation failed to meet ICAO standards for regulating aviation businesses and granting air operator certificates within a 90-day deadline.
These failures have not yet been rectified.
The problems stem from ongoing staff shortages at a time when many new airlines were entering the industry, Thai aviation officials have said.
"A Category II International Aviation Safety Assessment [IASA] rating means that the country either lacks laws or regulations necessary to oversee air carriers in accordance with minimum international standards, or its civil aviation authority -- a body equivalent to the FAA for aviation safety matters -- is deficient in one or more areas, such as technical expertise, trained personnel, record-keeping, or inspection procedures," the FAA said in a statement.
The demotion automatically restricts existing flights to the United States, and while this will have no immediate effect on the country's aviation industry since no Thai airlines fly to North America, it does also ban any new routes to the US until a Category I ranking is restored.
Furthermore, the downgrade will erode the credibility of the country's civil aviation authorities, aviation officials said.
Thailand was assigned an initial Category II rating in 1996 and was upgraded to Category I in 1997. Category I means a country's civil aviation authority complies with ICAO standards.
With a Category I rating, a country's airlines can establish service to the United States and operate under the code of US carriers.
In order to maintain a Category I rating, a country must continue to adhere to ICAO safety standards, the FAA said.
"A reassessment in July 2015 found that Thailand did not meet international standards," the administration said.
Tuesday's announcement followed discussions between the FAA and the Thai government that concluded on Oct 28.
Airport Department director-general Chula Sukmanop said the downgrade was inevitable as Thailand had not rectified the problems identified by the ICAO, especially in the process of reissuing licences for all 28 Thai-registered airlines that fly internationally.
"What we need to do now is to urgently tackle all those problems pointed out by the ICAO," said Mr Chula, also director of the Office of Civil Aviation. "When the red flag is lifted, the FAA will upgrade us."
Tassapon Bijleveld, chief executive of low-cost carrier Thai AirAsia, urged Prime Minister Prayut Chan-o-cha to take a leading role in tackling the problem.
Mr Tassapon said the prime minister's involvement was necessary as the Command Centre for Resolving Civil Aviation Issues, set up after the ICAO red flag and chaired by Air Force Commander Tritos Sonchaeng, had failed to tackle the problems effectively.
"I suggest the prime minister call a meeting with airline operators to hear what the problems and solutions are," Mr Tassapon said.
Another airline executive, who declined to be named, said the Thai aviation industry potentially faces further embarrassment on Dec 15, when the European Aviation Safety Agency (EASA) announces the results of its audit in Bangkok last month.
"The worst-case scenario will be if the EASA's findings are in line with the FAA's," the executive said.
"This would affect Thai flights to all European destinations."
Dozens of airlines fly direct between Bangkok and numerous European airports daily.
