SANTIAGO, Chile, June 10 (Reuters) - Chilean aviation officials revoked on Monday the operating license of Peru's flagship airline Aero Continente, saying the carrier had violated domestic safety rules. The measure is the latest in a number of run-ins the airline has had with Chilean officials in the past year. "Due to the nature of the information gathered, the aeronautical authority has determined that the company's management capacity is gravely affected, which jeopardizes the safety of its air operations," Chile's Civil Aeronautical Board said in a statement. The airline, which competes with Lan Chile (LAN) (LFL) locally, is not allowed to fly in the country as of Monday. The government body said the company had fallen behind on its maintenance and operating checks as well as crew instruction and had failed to pay required fees to the civil aviation authorities. "Our aim...is to guarantee the safety of air operations and protect the lives of users of the national aeronautical system," it said. Aero Continente, one of Latin America's fastest growing airlines known for its low fares, accused Chile of trying to force it out of the market and urged reciprocal action by the Peruvian government against Lan Chile. "Just a few days of unpaid salaries. This is really a pretext for taking us out of the game just when we were starting to recover little by little," said Aero Continente's president Lupe Zevallos. Aero Continente was forced to halt operations here in July 2001 on accusations of laundering drug money. The court-ordered suspension was lifted after two months for lack of evidence. The carrier resumed partial operations late last year but several planes were grounded again after Chilean officials detected safety problems. Aero Continente is now trying to sue the Chilean government for damages. "We've had enough. We hope that the Peruvian government shows some respect for Peruvian companies and removes the permits for Lan Peru, which has Chilean capital, or Lan Chile," said Zevallos. Aero Continente has a 4 percent of the Chilean domestic air traffic market while Lan Chile controls 95.7 percent. ©2002 Reuters Limited.