Malaysia Airlines was in big financial trouble before the twin disasters of Flight 370 and Flight 17 claimed the lives of 537 people.
Those tragedies would force changes to the way the company operates, Malaysian Prime Minister Najib Razak said.
"We believe our national carrier must be renewed," he said. "This means wholesale change, to deliver a wholly different outcome."
The airline was once a symbol of national pride. But it hadn't turned a profit in years, efforts to compete with low-cost carriers had failed, and the need for yet another government bailout was growing.
Analysts have long argued that Malaysia Airlines needed to slim down, and drop flashier features of a flag carrier.
For example, the airline could operate fewer full-service flights and increase seat counts.