By Kylie Madry and Adriana Barrera

MEXICO CITY (Reuters) -U.S. aviation regulators finished a review of Mexico's airspace safety but have not yet announced a final decision, Mexico's transportation ministry said on Friday, more than two years after the country was stripped of its top air rating.

The U.S. Federal Aviation Administration (FAA) still has several weeks to finalize a decision about whether Mexico will recover the rating, the transportation ministry said in a statement.

The FAA downgraded Mexico's aviation safety rating to Category 2 in 2021, citing safety deficiencies and blocking Mexican carriers from adding new U.S. flights.

Since Mexico lost the rating, the FAA has conducted a series of audits on the local civil aviation authority and its compliance with international safety standards.

A government source told Reuters earlier on Friday that the concluded audit was Mexico's "last," implying a positive resolution.

Mexican newspaper El Financiero had earlier reported that Mexico had already recovered the safety rating, citing government sources, but a short time later backtracked on the initial report.

Restoring the FAA's Category 1 safety rating would clear airlines like Aeromexico and Volaris to add new routes to the United States and potentially carry out marketing agreements with U.S. carriers.

Aeromexico CEO Andres Conesa said last year the damage done by the downgrade was "significant."

In the two years since the FAA dropped Mexico to Category 2, the country has revamped its aviation standards, replacing officials and most recently overhauling its civil aviation law.

Asked to comment on Mexico's air safety rating, an FAA spokesperson would only say the agency continues "to provide assistance to Mexico's civil aviation authority."

(Reporting by Kylie Madry and Adriana Barrera; Additional reporting by Carolina Pulice and Ana Isabel Martinez; Editing by Brendan O'Boyle, David Alire Garcia and Diane Craft)