Air Carnival, which has not flown since early April 2018, had its Air Operator Permit suspended by the Directorate General of Civil Aviation, as the airline failed to satisfy the regulator in its response to the show-cause notice.

The airline had two-weeks time period to respond to the initial show-cause notice.

Air Carnival began operations in July 2016 with with one leased ATR72, operating 10 daily flights from Chennai, Trichy and Tuticorin to Coimbatore. The aircraft was already returned to the lessor.

The airline's promoters planned to sell the airline to an an angel investor for US$10.4 million, but the transaction is yet to materialize.