Italy’s troubled flagship airline Alitalia has gone into administration after the Italian government formally approved the move.
The company said its flight schedule would continue to operate as planned, while administrators examine whether the firm can be turned around.
Alitalia has received more than 7bn euros (£5.9bn) from the Italian state over the last decade.
But without further support, it may end up permanently grounded.
Last week, airline employees voted against a plan to cut jobs and salaries that would have allowed it to secure new funds.
Alitalia said in a statement that Italian shareholders and Etihad, the Abu Dhabi airline that owns 49% of Alitalia, had been “committed to recapitalise and finance the plan with 2bn euros”.
But without the approval of workers, the plan could not go ahead, the airline said.
On Tuesday, Italy’s government gave the go-ahead for Alitalia to enter administration.
It also approved a 600m euro bridging loan to allow Alitalia to keep operating during the administration process, a spokesperson for Alitalia said.
The government has called for administrators to find prospective buyers as quickly as possible, while also minimising the amount of public money spent on the airline.
Survival at stake
James Hogan, chief executive of Etihad, said: “We have done all we could to support Alitalia, as a minority shareholder, but it is clear this business requires fundamental and far-reaching restructuring to survive and grow in future.
“Without the support of all stakeholders for that restructuring, we are not prepared to continue to invest.”
Italy’s industry minister last week opposed renationalising, or providing further funds for, the troubled carrier.
And public opinion seems to be behind the decision. Italians have taken to social media in recent days calling for politicians to resist bailing the airline out again.
An opinion poll published on Friday suggested 77% of Italians believe the airline should be left to fail.
However, with an election looming next year, politicians may be reluctant to see Alitalia’s 12,500 employees lose their jobs.