Relatives of MH370 passengers have criticised Malaysia Airlines after an official reportedly said authorities would set a date to announce the plane "lost".
An industry source has said such a declaration would see the search called off.
Both Malaysia Airlines and officials in Australia, which is leading the search for the missing jet far off its western coast, have denied the reported comments by the carrier's commercial director Hugh Dunleavy.
But Voice370, an association of MH370 victims' relatives, said in a statement that it was "bewildered" by the report last week.
"Such unilateral declaration brings intense agony and confusions to family members and makes us lose faith in the search effort," it said.
A New Zealand Herald article, citing Mr Dunleavy, said authorities were working to set a date, likely by the end of the year, to formally announce the loss of the Boeing 777, which vanished off radars on 8 March with 239 people aboard.
"We don't have a final date but once we've had an official loss recorded we can work with the next of kin on the full compensation payments for those families," he was quoted as saying.
An industry source familiar with the MH370 saga said once the plane is declared lost, all search efforts will be stopped.
"The talk has been that the search has been futile so far and it's unlikely to bring anything," he said.
In a statement, Malaysia Airlines distanced itself from Mr Dunleavy's comments, saying it was his personal opinion and "ongoing search and recovery operations will remain and will not be discontinued".
It said any information regarding MH370 will only be communicated by the Joint Agency Co-ordination Centre in Australia.
Officials at the JACC said that Mr Dunleavy's comments were "greatly disturbing for the families and loved ones of the passengers and crew on board MH370", reiterating Australia's commitment to the search.
MH370 inexplicably disappeared en route from Kuala Lumpur to Beijing in what remains one of history's great aviation mysteries.
Australia has been spearheading the hunt for the plane, which is believed to have crashed in the southern Indian Ocean off western Australia.
Some next-of-kin bitterly accuse the Malaysian government and airline of a bungled response and cover-up, charges that they have strenuously denied.
A Malaysian family last month sued the government and the airline for negligence in what is believed to be the first lawsuit filed over the disaster.