Alitalia has entered ‘extraordinary administration’ after workers rejected its restructuring plans to save €2 billion ($2.1 billion).

It says shareholders and Etihad Airways, which owns 49 per cent of shares had created an industry plan to reduce structural costs of which two thirds were not related to labour costs, and were committed to recapitalise and finance the plan with €2 billion.

The commitment was subject to an agreement with the trade unions, which was rejected by the employees in a referendum, and Alitalia says the vote means it cannot implement the relaunch and restructuring of the company.

Alitalia says: “The Board of Directors, which convened after the shareholders meeting, having acknowledged the serious economic and financial situation of the Company, of the unavailability of the shareholders to refinance, and of the impossibility to find in a short period of time an alternative, has decided unanimously to proceed with the filing for “amministrazione straordinaria”  (extraordinary administration) in compliance with the Italian law.”

Alitalia also says all flights will operate as planned.