Sri Lanka earlier tentatively cleared three local firms -- Holiday Air, Expo Aviation and Deccan Air -- to fly international routes subject to technical clearance.
But the three failed to meet the deadlines, with the Civil Aviation Authority saying their offer has since lapsed.
"Our letter of offer expired in October last year," Director General of Civil Aviation, H M C Nimalsiri told LBO.
"We did make a request to the minister of aviations to extend the offer, but nothing has been forthcoming," Nimalsiri said adding that only national carrier SriLankan and newly approved Mihin Air are now allowed to fly international routes.
However, officials of the three budget carriers, remained confident that they still had a strong case for a license.
"We have asked for an extension from the aviation regulator," Shafeek Cassim, Expo Aviation's managing director said.