Changes to Italy's bankruptcy laws adopted last August were definitively adopted by the Senate on Friday just three days before a decree containing the measures was set to expire.
Dubbed the 'Alitalia decree', because it was clearly tailored to help the national carrier, the measure allowed the airline to be declared bankrupt and granted its government-appointed administrator, Augusto Fantozzi, the powers to spin off and sell the carrier's profitable flight operations debt-free and to sell or liquidate the remaining assets to help pay for Alitalia's over one-billion-euro debt.
The changes were originally part of a rescue plan for Alitalia drawn up for the government by Intesa Sanpaolo, Italy's second biggest bank.
The so-called Phoenix Plan was then used as the basis for an offer for Alitalia's flight operations presented by Compagnia Aerea Italiana (CAI), a consortium of Italian investors, which included Intesa, created with the government's active encouragement.
Under the revised bankruptcy regulations, antitrust laws can be bypassed if this is in the ''general interest'' and should a monopoly be created, as would be the case if Alitalia's Milan-Rome routes are merged with those of CAI partner Air One as planned, antitrust authorities can only take action after June 30, 2009.
Observers noted that the deadline was specifically drawn up for the case of Alitalia.
Air One is Italy's biggest private airline.
Other provisions in the Alitalia decree dealt with softening and compensating layoffs and reimbursing small shareholders for their losses.
Gone from the definitive version of the bill was a pre-emptive pardon for Alitalia's top executives, past and present, for their role in the airline's bankruptcy.
The airline's middle level executives, on the other hand, will be shielded from responsibility for carrying out decisions made by their superiors.
The so-called 'save the boss' provision had sparked a political flashpoint which cut across political lines and even Economy Minister Giulio Tremonti threatened to quit if the measure passed.
CAI is currently putting the finishing touches on its formal offer for Alitalia's flight operations and is moving to become a joint stock company with additional new partners, including a foreign airline to act as the future carrier's strategic partner.
Germany's Lufthansa and Air France-KLM are considered to be the front runners to fill this role.
