Fly Montserrat airline has received a letter from the Eastern Caribbean Civil Aviation Authority restricting them from flying into any ECCAA member state, which effectively grounds the airline.
The ban will be in place until the airline meets certain requirements, Premier Reuben T. Meade has confirmed.
Fly Montserrat flies to Nevis and Antigua, both of which are covered by ECCAA.
The ECCAA ban follows an incident in which a Fly Montserrat aircraft rolled onto the grass on landing at John Osborne Airport in Montserrat this morning.
In a statement issued today, Fly Montserrat stated, "The flight, 5M 2109, from Antigua with seven passengers, landed normally and decelerated along the runway. The pilot thought that he felt a minor vibration and as a precaution, he let the aircraft roll gently onto the grass, where the passengers disembarked. There were no injuries and no damage to the aircraft."
In a brief statement released Tuesday morning, the Montserrat government confirmed no injuries were reported.
"Airport Officials confirmed the incident but said it was still too early to give a report on what led to the plane going off the side of the runway. The airport has been closed until the aircraft can be moved for further investigation," the statement said.
Investigators from UK air accident investigation branch are now on the island to look into an accident.
In another statement issued Tuesday afternoon, His Excellency, Adrian Davis, Governor of Montserrat, said, "Once this investigation has established the probable cause(s) of the incident, I will make public their preliminary findings. A full report, which will also be made public, will follow some time after that."
The flight was said to have been returning from Antigua at 9.40 am with seven on board, six passengers and one pilot.
The incident follows a deadly plane crash at the VC Bird International Airport last Sunday.
British citizen Michael Hudson, who miraculously survived Sunday's crash, was up to Friday recovering and in "relatively good spirits" following surgery at Antigua's Mount St John's Medical Centre.
The 23-year-old Englishman was the sole survivor of the tragedy which killed three Caribbean nationals when the nine-seater Fly Montserrat Britten-Norman BN2 A Islander lost height immediately after becoming airborne and plunged back onto the runway.
The aircraft's pilot, Jason Forbes of Antigua, and 29-year-old Jamaican teacher Annya Duncan were pronounced dead at the scene. The other passenger, Sandrama Poligadu, 57, of Guyana, was rushed to hospital but died shortly afterwards.