Malaysia Airlines was struggling with growing losses, debt and a troubled business model well before the loss of two of its airplanes this year.

Faced with competition from low-cost Asian carriers as well as pressure from the high-end airlines of the Persian Gulf, Malaysia Airlines had been losing money in the last three years. Tense labor relations and a bureaucratic management culture had stymied earlier efforts to reform the airline despite more than $1 billion in government investment in the last decade.

On Friday, the Malaysian government, signaling that the embattled airline remained a strategic asset, announced that it would take full control of the company through a stock buyback and restructure its operations in an attempt to restore confidence in the flagging business.

While a restructuring was long overdue, the airline must now also contend with dual crash investigations, as well as resolve potential liability and insurance issues. The airline has had a sharp drop in bookings after the loss of its airplanes. Business from China has been particularly hard hit.