The Civil Aviation Safety Authority (CASA) banned Skymaster Air Services for five days on Friday, citing a "serious and imminent risk to air safety".
CASA said the company's aircraft had been involved in a number of accidents in past three months, including a fatal crash at Canley Vale on June 15 and other "serious" incidents.
A pilot and a flight nurse were killed when a PA-31P twin-engine aircraft hit power lines and plummeted onto a street next to a primary school in suburban Canley Vale.
Andrew Wilson, 27, and nurse Kathy Sheppard, 48, were travelling from Bankstown to Brisbane, and were about 6km from the airport runway when their plane went down.
Other incidents have plagued the operator, including landing-gear malfunctions, fuel flow problems and a loss of engine power.
On one occasion a plane landed with its wheels up, while another's nose gear collapsed, CASA said.
A second flight company, Avtex Air Services, owned by Dieter Siewert - the same man who owns Skymaster - has also had its air operator's certificate suspended for five days.
Both companies are based at Bankstown Airport and share about 19 aircraft.
Safety culture issues
CASA's decision was based on issues relating to the safety culture of the operations, aircraft maintenance control and pilot training, it said in a statement.
"CASA believes allowing Skymaster Air Services and Avtex Air Services to continue to operate while CASA completes further safety investigations poses a serious and imminent risk to air safety," it said.
To extend the order, CASA would need to apply to the Federal Court.
If successful, the operators face bans of up to 40 days.
The authority's actions are independent of the investigation into the Canley Vale accident by the Australian Transport Safety Bureau (ATSB) which is ongoing.
ATSB's preliminary report
Earlier this month the ATSB released a preliminary report on the crash, which revealed a number of witnesses saw the aircraft's right propeller stop and heard a "spluttering" sound coming from the engine.
A final report is expected to be released before June next year.
Skymaster said no one was available for comment when contacted by AAP on Saturday.
