Malaysia Airlines may cancel plans to retire its fleet of Boeing 737s and replace them with at least 40 new Boeing or Airbus aircraft, as it seeks ways to cut costs, a report said Monday.

The New Straits Times quoted unnamed sources as saying that the national carrier may have to continue using its current 737s, which industry experts believe will still be airworthy for another 10 years.

The airline earlier this year asked for proposals from Boeing and Airbus and the daily said it was believed to be looking at more than 40 Airbus A320s or Boeing 737-700/800s to replace its 737-400s.

The replacement program was aimed at switching to more fuel-efficient aircraft. The 737s are mainly used on Malaysia Airlines' domestic routes.

Five-year plan

The Straits Times said earlier this month that Malaysia Airlines is also planning to raise fares and sell assets as part of a strategy to turn the troubled national carrier around.

After announcing one of its worst-ever quarterly losses of RM280.66 million (US$74 million) in the three months to June, Malaysia Airlines has said it will undertake a five-year plan to boost profits by up to RM1.0 billion.

The airline also appointed a new chief executive - Idris Jala, who will take over next month - and announced its third hike in fuel surcharges.

Newspaper reports have said the carrier plans to slash the pay of top managers and reduce the size of its overall workforce.