Under strain from a downturn in the tourism industry after the 2004 Indian Ocean earthquake, and struggling to maintain its fleet of ageing aircraft, Phuket Airlines was plagued by poor service and safety concerns. The European Union blacklisted the airline, banning it from flying to Europe. By the end of 2005, Phuket Air had scaled back its operations, laid off hundreds of its employees and decided to concentrate on leasing its aircraft to other carriers. Domestic services ceased on 12 September 2005.