Queensland-based airline Barrier Aviation will remain grounded until February next year.
The airline flies to Horn Island, Darwin, Gove Peninsula, Papua New Guinea and the Pacific Islands.
The Civil Aviation Safety Authority (CASA) had originally grounded the airline for five days after an audit revealed safety concerns.
It has since successfully applied to the Federal Court to extend the suspension.
CASA spokesman Peter Gibson says Barrier must address serious safety risks.
"The problems centre on maintenance of aircraft - maintenance that's not being done, maintenance that's not being done properly, and maintenance that's not being tracked and recorded," he said.
"We've got no faith in the fact that the aircraft are being looked after in the way that they should be." Mr Gibson says he hopes the grounding will have minimal impact on Northern Territory travellers this Christmas.
"Obviously the Civil Aviation Safety Authority would prefer it if we didn't have to disrupt the travelling plans of people across the Top End but safety has to come first," he said.
"There are serious safety issues here.
They must be addressed before Barrier can fly again." The ABC has contacted Barrier Aviation for comment.