The future of Italian airline Alitalia was in doubt yesterday after staff rejected a last-ditch restructuring deal, sparking fears that the carrier may be grounded for good.

The government had warned that there was no alternative to the plan which called for 1,700 job losses and an eight-percent salary cut. The company's coffers are empty. But unions said more than two-thirds of voting employees threw out the proposal, which had earlier this month been approved by both management and unions, after almost 90 percent of the airline's 12,500 employees participated in Monday's ballot. Italian government ministers expressed "surprise and regret" at the outcome in a joint statement, saying it put the company's recapitalisation efforts at risk.Italian press reports said the airline's directors may quickly ask the state to call in special administrators to prepare a possible takeover or liquidation. The company is de facto controlled by Etihad Airways, which acquired a 49-percent stake when it saved Alitalia from bankruptcy in 2014.

The pressure to find a solution has been intense, with Alitalia's cash expected to run out this month, leaving its fleet grounded, unless the carrier finds emergency funding. Etihad and Italian banks Intesa Sanpaolo and UniCredit have said they would only inject new funds if the unions agree to the new collective labour agreement and cuts.