Regional authorities still could not locate Flight MH370 nearly 12 hours after it lost contact with air traffic control on an overnight flight from Kuala Lumpur to Beijing.
The airline has said the plane relayed no distress signal or other indications of trouble.
"The plane lost contact near Ca Mau province airspace as it was preparing to transfer to Ho Chi Minh City air traffic control," a statement posted on the official Vietnamese government website said.
The plane's signal was never transferred to Ho Chi Minh air traffic control, it added.
Ca Mau province is in southernmost Vietnam.
The ministry launched a rescue effort to find the plane, working in coordination with Malaysian and Chinese officials, the statement added.
Contact was lost at 2:40 am local time (1840 GMT Friday), about two hours after take-off from Kuala Lumpur International Airport, the carrier's CEO Ahmad Jauhari Yahya said.
"Ladies and gentlemen, we are deeply saddened this morning with the news on MH370," he told a press conference in Malaysia.
"Our focus now is to work with emergency responders and authorities, and mobilise full support," he added.
"And our thoughts and prayers are with all affected passengers and crew, and their family members."
The airline and Malaysian authorities were liasing with Vietnamese officials in a bid to locate the plane, he added.
The Boeing 777-200 was carrying 227 passengers, including two infants, and 12 crew members, Ahmad Jauhari said.
They included 153 Chinese nationals including one infant, 38 Malaysians, and 12 Indonesians.
Seven Australians also were aboard, three French nationals, four from the United States including one infant, plus passengers from several other countries.
Malaysia Airlines has a good safety record. Its worst-ever crash occurred in 1977, when 93 passengers and 7 crew perished in a hijacking and subsequent crash in southern Malaysia.
The pilot of MH370 was Capt. Zaharie Ahmad Shah, 53, who had flown for the airline since 1981, the carrier said.
Its first officer Fariq Abdul Hamid, 27, joined the airline in 2007.
The plane was more than 11 years old.
China expresses concern
MH370's flight path passes over the South China Sea and the Indochinese peninsula before entering southern Chinese airspace.
"This news has made us all very worried," Chinese Foreign Minister Wang Yi said in Beijing.
"We hope every one of the passengers is safe. We are doing all we can to get more details."
China's Xinhua news agency earlier quoted Chinese aviation authorities saying the plane did not enter China's air traffic control sphere.
A spokeswoman with a Thai agency that monitors the country's airspace told AFP the plane also did not cross over Thailand.
Screens at Beijing's airport indicated at first that the flight was "delayed", but later updated its status to "cancelled".
An accident would be a huge blow for the carrier, which has bled money for years as its struggles to fend off competition from rivals such as fast-growing AirAsia.
It recorded its fourth straight quarterly loss during the final three months of 2013, and warned of a "challenging" year ahead due to intense competition.
The carrier admitted in 2012 it was in "crisis", forcing it to implement a cost-cutting campaign centred on slashing routes and other measures.
In 2011, it chalked up a record 2.5 billion ringgit ($767 million) loss.
MH370's Boeing 777 has a solid safety record, with only a handful of incidents since its introduction in the mid-1990s.
In July 2013, a Boeing 777-200 operated by South Korea's Asiana Airlines skidded off the runway upon landing at San Francisco's international airport after it clipped a seawall before touching down.
Three people died.
"We're closely monitoring reports on Malaysia flight MH370. Our thoughts are with everyone on board," the manufacturer said in a statement on its Twitter feed.
Boeing has been beset by problems with its high-tech 787 Dreamliners put into service two years ago, including a months-long global grounding over battery problems last year.
The information vacuum regarding the flight touched off a frenzy on social media, which saw an outpouring of concern for passengers.
There were no immediate signs of passenger relatives descending in large numbers on Beijing's airport.
An AFP journalist saw one woman enter the arrivals zone at the airport and break down in tears. She was led away by police.
Reporters at Kuala Lumpur International Airport were barred from entering a specially-designated waiting area for relatives of those on the flight, as relatives looking somber and distraught trickled in escorted by authorities.
"They gave us no information so far," complained one man, whose niece and her husband were on the flight to go on a one-week holiday in China.
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