Hungary's government is again trying to sell loss-making national airline Malev but analysts said it will be hard to dispose of without major restructuring and radical cost cuts.

The government on Monday published an invitation to potential investors to submit letters of interest by Wednesday if they plan to take part in direct negotiations to buy Malev.

Last week the government cancelled the previous privatization tender for the airline as it considered the offers to be too low.

That cancellation was the second in less than six months. It was the fourth failed attempt since the government first tried to sell Malev soon after the collapse of communism 15 years ago.

"Malev has two possible routes to go. It can either go low cost or stay a network airline and find a regional niche," airline analyst Nick van den Brul at Exane BNP Paribas said.

"But either way, it needs considerable cost cutting and a radical approach to restructuring its business. The possibilities don't look good, given that it's not profitable at all," he said.

Malev has been trimming costs and restructuring but it has not taken any radical steps to turn the airline round.

Van den Brul said making Malev a low cost carrier was the more difficult of the available options. "To do that, you would have to essentially cancel the airline and start all over again. Their cost base is just too high," he said.

With nearly 35 billion forints (USD$182.4 million) in debt, the airline is also severely undercapitalized and any sale must involve a significant equity injection.

Malev, which has been seeing a niche market in the Balkans, is also going to run into increased competition from regional rivals such as Austrian Airlines and smaller players including Croatian Airlines, analysts said.

Malev's new Chairman Peter Honig said recently he believed the airline could be made profitable and should be given time to raise cash and sell non-core assets before it was sold.