Nigeria on Wednesday lifted the suspension slapped on Dana Air after a plane of the commercial carrier crashed in Lagos in June, killing at least 159 people in one of the country's worst air disasters.

Both of the plane's engines were said to have failed during its descent into Lagos and the jet ploughed into a busy neighbourhood not far from the airport.

Nigeria announced the suspension on 5 June, two days after the crash, saying authorities needed to review Dana's entire fleet, but the company insisted it would be cleared of negligence and would eventually resume operations.

"The federal government has lifted the suspension of the Operating Licence of Dana Airlines," said the statement from Aviation Minister Joe Obi.

"This follows government's satisfaction with the air-worthiness of the airline after a rigorous technical, operational and financial audit of the airline," it added. Dana "is now free to resume its normal operations".

The company is run by Jacky Hathiramani, the scion of a Nigerian business family of Indian origin which owns a large conglomerate - Dana Group - with interests as diverse as motors, dairy products and chemicals.

It was founded in 2008 as companies rushed to grab a share of a booming market and it had worked to expand its network since, according to the company's website.

Before the crash, Dana was among the most popular carriers in Nigeria, with heavy traffic on its Abuja-Lagos route. The McDonnell Douglas-83 aircraft that crashed in Lagos had taken off in the capital.