BANGKOK—The U.S. Federal Aviation Administration has downgraded the safety rating of Thailand's aviation industry, which could disrupt Thai airlines' international operations and hurt segments of the country's vast tourism industry.

The downgrade follows a similar move by the International Civil Aviation Organization in March that raised concerns about how Thailand's booming aviation sector is managed. The FAA's move to lower Thailand's rating to "category 2" means Thai airlines are unable to establish new routes to the U.S.

Thailand had been granted the highest category 1 rating in 1997. "A reassessment in July 2015 found that Thailand did not meet international standards," the FAA said in a statement released in Washington on Tuesday.

The agency's downgrade comes amid growing concerns over airline safety in parts of Asia.

On Tuesday, a crash investigation report into the loss of AirAsia Flight 8501 in the waters between Surabaya, Indonesia, and Singapore last December found that system malfunctions and improper pilot responses were to blame, with the loss of all 162 people on board. The disappearance of Malaysia Airlines Flight 370 in March last year with the presumed loss of all 239 people aboard, meanwhile, remains unexplained.

Thailand's largest airline, Thai Airways International PCL, shrugged off the initial impact of the FAA downgrade. "For Thai, there is no commercial or customer impact as Thai had already ceased operations to its only U.S. destination of Los Angeles as of 25 October 2015," the company's president, Charamporn Jotikasthira, said in a statement.

However, there could be knock-on effects following the FAA decision, including the possibility of the European Aviation Safety Agency launching its own review. That could potentially affect Thai Airway's flights to key European hubs.

The FAA downgrade doesn't necessarily mean that Thailand-based airlines are unsafe, but that aviation regulators are unable to provide sufficient oversight of the industry. It could take years for the country to regain its top-tier rating.

Aviation and government officials here say that supervision standards haven't kept pace with an explosion in the number of foreign tourists coming to Thailand in recent years. Many of them travel from China, Singapore and Malaysia, and the numbers have grown so much that authorities this summer repurposed an air force base east of Bangkok to help meet demand.

Former Transport Minister Prajin Juntong, who was previously the country's air force chief and who is now a deputy prime minister, said in an interview in July that Thai authorities haven't been strict enough in imposing best-practice safety standards and urged a slowdown in the number of new flights coming to Thailand. "We have not been as concerned with safety as we should have been. We even forgot about security," he said.

Another deputy prime minister, Somkid Jatusripitak, who oversees Thailand's economic policy, told reporters Wednesday that the government should now revamp its aviation agencies to restore foreign confidence and help establish Thailand as a regional aviation hub.

Thailand's Department of Civil Aviation previously said the FAA probe focused mainly on training and numbers of supervisory personnel.

Nopparat Chaichalearmmongkol contributed to this article

Write to James Hookway at james.hookway@wsj.com

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(END) Dow Jones Newswires

December 01, 2015 23:55 ET (04:55 GMT)