LinksAir loses Cardiff-Anglesey airline safety licence
The airline which operates the Cardiff-Anglesey air route has had its safety licence revoked.
The Civil Aviation Authority (CAA) said the action over LinksAir was taken to "protect the travelling public".
Transport Minister Edwina Hart said a new operator had already been found to run the Welsh government-subsidised route.
Welsh Conservative leader Andrew RT Davies said ministers had be more transparent about spending decisions.
The CAA said: "The UK Civil Aviation Authority has suspended the safety certificate for UK airline LinksAir.
"Safety is always our first priority and we will always take action when necessary to protect the travelling public."
The twice-daily return flights, running since 2007, get a £1.2m annual subsidy.
In 2012-13 passenger numbers were 8,406, down from 14,718 in 2008-09.
Mr Davies said: "At a time when we have called for Labour's entire business grants system to be reviewed, this is further evidence of a clear need to ensure boosted transparency in value for public money.
"Given the CAA's decision around safety approval for LinksAir, communities will rightly ask questions and Labour ministers must provide swift assurances."
Ms Hart told the Senedd it was a matter for the CAA, but added: "We have obviously been appraised of the situation.
"We're looking at one airline in one particular route and the CAA has obligations it has to adhere to."
A Welsh government spokeswoman said: "We are aware of the decision of the Civil Aviation Authority in relation to the operator of the Intra Wales Air Service.
"A replacement operator with the necessary accreditations was secured to ensure the service continued from Tuesday.
"LinksAir informed passengers in advance of the cancellation on Monday and passengers were offered tickets for replacement train services or refunds."
Danish company North Flying has taken over the operation of the route.
Analysis by BBC Wales business correspondent Brian Meechan
There are a lot of hoops to jump through in order get these safety licenses and this move would not have been taken lightly.
We do not know the details of what went wrong, but it is certainly something serious to have resulted in such repercussions.
The service will now be operated by a Danish company, North Flying. There will be no extra cost to the Welsh government.
I suppose the one thing we can say is that the system has worked and the regulator has taken this major step following concerns about an airline.