Staff prayers at Malaysia Airlines' headquarters in Kuala Lumpur led by the company's CEO.

Battered by two deadly airline disasters this year alone, Malaysia's flag carrier is in deep crisis.

Its passenger numbers are dwindling and its losses are mounting.

Scenes of angry passengers and deep sorrowful mourning have all but ruined its global reputation.

The latest reminder of tragedy - Dutch forensics officers say they have identified the remains of 173 victims of Malaysia flight MH17 shot down over Ukraine in July.

Analyst Mohshin Aziz of Maybank.

ASSOCIATE DIRECTOR, MAYBANK, MOHSHIN AZIZ SAYING:

"Unfortunately there's no one single problem, there's a multitude of problems from a very outdated fleet type and also product offering. It's something that they're trying to address but probably will take another year or so to complete."

Now staff of Malaysia Air are bracing for major job cuts.

A source telling Reuters that up to a quarter of the nearly twenty-thousand strong work force may be axed in the government restructuring.

The layoffs are likely to be sweetened with costly redundancy packages, and offers of jobs at other state-owned companies.

 REPORTER, SAYING:

"And herein lies one of the issues at the heart of Malaysia Airlines' woes. Even before these two disasters struck, the airline was haemorrhaging money, falling behind high-end competitors such as Singapore Airlines, and budget operators like home-town rival Air Asia."

Other bloated national carriers in the region are feeling the crunch.

Australia's Qantas on Thursday (August 28) announcing its biggest loss ever as restructuring costs wipe out earnings.

To succeed, the Malaysian carrier may require a new CEO who is able to challenge the old state-owned model.

But this tragedy is on course to force the majority owner - sovereign wealth fund Khazanah Nasional - to buy-out public shareholders and delist the firm, drawing the carrier even closer to the Malaysian government.

Add on the serious reputational and financial headwinds the damaged brand already faces, and for that new chief executive, you've got one of the most difficult jobs in the aviation world today.