Malaysia Airlines has had its FAA safety ratting cut to Category 2.
The effect of this is that the airline is barred from introducing new routes to the US and any US airline (in this case American via OneWorld) is banned from code sharing with immediate effect.
Any Malaysian flight would also be subject to additional safety inspections at US airports.
The Category 2 doesn’t mean there is necessarily poor maintenance – it tends to be orientated more towards a lack of consistent government oversight of its safety regime.
Thai Airways is suffering from Category 2 status – having been Category 3 at one point and banned.
Vietnam recently acquired Category 1 after intensive efforts to demonstrate its governance and safety regime.
It’s not disastrous for Malaysian, but it may cause other states to examine their attitude to the airline. The EU is especially likely to do so.