Malaysia Airlines to 'file for bankruptcy or go private' in turnaround plan

Malaysia Airlines set to present a turnaround plan later this week which could see it filing for bankruptcy or taken private ahead of major restructuring

A closed Malaysia Airlines counter at Schiphol airport near Amsterdam (EPA)

Embattled Malaysia Airlines could file for bankruptcy this week as it struggles to stay afloat after two tragic disasters in less than six months.

The airline is due to present a turnaround plan later this week to Khazanah Nasional, Malaysia's sovereign wealth fund which holds a majority stake.

Some of the proposals will include taking "the company private or allowing it to go bankrupt and then renegotiating union contracts", Bloomberg reported, citing a source close to the matter.

The airline has seen its share price decline 35 per cent in the first half of the year following the loss of Malaysia Airlines Flight 370 over the Indian Ocean and the tragic crash of the MH17 in eastern Ukraine last week, killing 298 people and taking the total death toll to 537 people.

The carrier reported a net loss of 443 million ringgit (£81 million) in the first quarter, widening from a loss of 279 million ringgit (£51 million) in the same quarter a year ago. Before the fatal crash and the disappearance of the 370, Malaysia Airlines had been struggling against competition from rival low-cost airlines in its home markets, racking up losses of more than $1.4 billion since 2011.

Mohshin Aziz, an analyst at Maybank in Kuala Lumpur, said the airline will not survive more than a year in its current form without "significant" funding, while others warned that a cash injection may not be enough to fix the "brand".