Further losses are expected by Malaysia Airlines in the second half of the year following the two tragedies to hit the airline in recent months.
The carrier admitted that there had been “a sharp decline” in weekly bookings.
Despite increases in capacity and revenue as well as cost-saving measures and productivity improvements, the group has continued to report weak financial performance, MAS said.
“The weak financial performance has made Malaysia Airlines acutely aware of the need to restructure the company’s operations, even prior to the double tragedies of MH370 and MH17,” the airline said.
“The occurrence of the two incidences within a short span of four months served to worsen the situation further.”
Chief executive Ahmad Jauhari Yahya said: “We operate in a harsh business environment of stiff competition from regional and global carriers and high operational costs.
“Coupled with the impact of the two tragedies which have damaged our brand, the need to restructure the company was accelerated.
“The full financial impact of the double tragedies of MH370 and MH17 is expected to hit Malaysia Airlines in the second half of the year.
“Our company has had to undergo a thorough re-examination and re-evaluation in order to reposition ourselves as a stronger and more sustainable Malaysia Airlines for the future.”
He spoke as the airline reported a second quarter net loss of RM 307 million (£58.7 million) for the three months to June on top of a RM 443 million loss in the first three months of the year.
The airline has been affected by the crash of flight MH17 in Ukraine and the disappearance of flight MH370.
“We expected the impact of MH370 on the performance in Quarter 2,” said Ahmad Jauhari. “Given that, our team put in much hard work and effort to regain market confidence and rebuild sales.
“Tragically, just as we were beginning to see signs of recovery in all regions, we were dealt the blow of MH17.”
MAS majority shareholder Khazanah Nasional announced plans earlier in the month to take full ownership of the airline and delist it from the Malaysia stock exchange.
If approved, it will put into action a plan to restructure the airline towards returning it to profitability, MAS said without giving further details or outlining the likely impact on jobs.
The restructuring is expected to involve the cutting of about a quarter of the airline’s 19,500 staff, dropping some long-haul routes and the creation of a new business plan.
Reports this morning say 6,000 jobs are to be cut at MAS as part of a radical recovery plan.
The cull in staff numbers represents around 30% of its workforce of almost 20,000.
The airline will become completely government owned – the state investment company that owns a 69% stake in the troubled firm will take 100% ownership.
Flight MH370 disappeared on March 8 on its way to Beijing with 239 people on board while MH17 was shot down in Ukraine on July 17 killing all 298 passengers on board.