Monarch has confirmed it will undergo a strategic review, covering "all areas of the business from operations to ownership and financing".
The Sunday Telegraph said the review was likely to mean "taking an axe to routes and retreating from bases".
According to the report, Monarch is understood to need as much as £60m of fresh capital, despite controlling shareholders the Mantegazza family pumping £120m into the group since 2009.
"Dean Street Advisers is leading the search for an external investor but the Mantegazzas have also appointed restructuring specialists from PwC, who are working on a rescue plan in case Monarch is unable to strike a deal to bring in fresh capital," The Sunday Telegraph added.
The Monarch statement said: "The group confirms it is undergoing a strategic review under the leadership of new non-executive chairman Sir Roy McNulty and chief executive Andrew Swaffield.
"The review covers all areas of the business from operations to ownership and financing, with the objective of determining the optimum structure to realise the significant opportunity to build on the respected Monarch brand and distinctive offer to its customers in the budget airline market."
