The best option for Malaysia Airlines may be bankruptcy, analysts told CNBC, after last week's crushing earnings report sent the firm's shares tumbling over 18 percent on Monday to a record low of 15 sen ($0.05).
On Thursday the airline reported a 443.4 million ringgit ($137.8 million) net loss for the quarter, compared with a 278.8 million ringgit loss in the same period a year earlier.
MAS blamed a steep drop in sales from China following the disappearance of flight MH370, which disappeared on March 8 carrying 239 passengers and crew. Its share price is now down nearly 50 percent year to date.
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"Bankruptcy might not be a bad thing under the circumstances," Mohshin Aziz aviation analyst at Maybank Investment Bank told CNBC.
"What's clear is something needs to be done - something drastic, something that has not been done before in the past," he added.
MAS was already vulnerable before the disappearance of flight MH370. The airline has been losing money for the past three years as competition from low-cost carriers like AirAsia ate into profits.
Bankruptcy might be one of several options for the airline to restructure after years in the red, the Wall Street Journal reported Prime Minister Najib Razak as saying.
Malaysia Airlines plans to undertake a thorough review of its business as it seeks a path to recovery. Reuters has reported that the airline is mulling selling part of its engineering unit and upgrading its ageing fleet.
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However, Aziz was pessimistic on the prospects for a turnaround, and referred back to the last three times Malaysia Airlines tried to overhaul its business with fresh management and a capital injection.
"The overlying method all three times was similar and that's why the outcome was also unfortunately similar, and of course, we have the MH370 incident which further exacerbated the situation," he added.
Timothy Ross, head of transport research for Asia-Pacific at Credit Suisse, pointed out that state-owned airlines in other parts of the world have enjoyed the most successful transformations after going through bankruptcy.
"If you look back at the U.S. and Japan's experience where they've had the most successful examples of restructuring taking place, it's been typically either in bankruptcy or under the threat of bankruptcy," he said, referring to American Airlines' bankruptcy in 2011 and Japan Airlines' in early 2010.
Malaysia Airlines was not available for comment when contacted by CNBC.
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Meanwhile Maybank's Aziz also said Malaysia should take heed of what's happened in aviation sectors around the world.
"If we can take a cue from America and Europe, they have taken the painful pill of killing off their national carriers... somehow things turn better after two to three years," he added.
Reputational damage
Many industry watchers are concerned that the disappearance of MH370, and the intense media attention it attraction in the weeks and months following, has led to drastic reputational damage for the airline.
But Credit Suisse's Ross said he thought it was possible for MAS to recover its reputation.
"As long as the blame can be laid at an individual's door or blamed on an unfortunate turn of events that couldn't be overcome, then the carrier's brand should have nothing to worry about. Asiana bounced back completely from its crash last year, there's no reason why the airline [MAS] can't do the same," said Ross.
Ross acknowledged, however, that while Asiana was able to identify the cause and blame of the crash, which occurred last year, on the same day, MAS has been subject to ongoing negative media branding due to the mystery surrounding the crash.
"It's unhelpful that every time you Google MAS, there are (say) 20 news stories filed in the last 24 hours about how this or that is delaying the search," he added.
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Investigators are yet to find any wreckage from MH370 more than two months after its disappearance. It was concluded on March 24 that the flight ended in the southern Indian Ocean.