The US Federal Aviation Administration (FAA) has downgraded Malaysia’s air safety oversight rating.
The FAA said on Monday that Malaysia's Civil Aviation Authority no longer meets international safety standards.
Under the revised Category 2 rating, Malaysia’s carriers can continue existing service to the United States but are not be allowed to establish new services to the United States.
The only Malaysian airline route to the United States is AirAsia X services from Kuala Lumpur to Honolulu via Osaka.
The FAA's safety rating is based on a country's aviation oversight regime and is an assessment of the country's civil aviation authority.
Under Malaysia's Category 2 rating, the FAA will also not allow reciprocal code-sharing arrangements between US carriers and Malaysian airlines.
The FAA said it would work with Malaysia to help fix any air safety lapses.
The downgrade places Malaysia in the same category as Thailand, which was downgraded to Category 2 in December 2015 and has since tried unsuccessfully to restore its Category 1 rating.
Other countries in Category 2 include Bangladesh, Ghana and Costa Rica.