Air Canada has formally emerged from bankruptcy protection from its creditors, and says it has re-emerged as a new carrier ready to compete with discount airlines.

The restructuring process began April 1 of last year, when Canada's largest airline took shelter under the Companies' Creditors Arrangement Act. After months of negotiations with its creditors, the airline has reduced its debt from $12 billion to $5 billion.

The restructuring completion on Thursday leaves Air Canada owned largely by its creditors, and its old shares essentially worthless.

The company's new shares, which will move under the ticker symbol of ACE.RV on the TSX, will begin trading Monday and are widely expected to climb steeply from their issue price of $20.

"We're emerging from CCAA focused and well on our way to becoming a profitable, growing and competitive company in a rapidly changing industry," Robert Milton, Chairman and CEO of ACE Aviation Holdings Inc., said in a statement.

Air Canada is being run by parent company ACE, which stands for Air Canada Enterprises. It now has $1.9 billion in cash on hand.

The airline's employees gave more than $1 billion in annual savings to the airline in two rounds of concessions. It now intends to operate with several thousand fewer workers and have no negotiations over wages until at least 2006.

The new business plan also includes flying smaller aircraft: This week, the airline confirmed purchases of at least 45 93-seat Brazilian Embraer 190 aircraft for $1.35 billion US and 30 Bombardier regional jets with 74 and 50 seats worth $821.2 million US.

In the restructuring, General Electric Capital Corp. shuffled aircraft leases and provided a term loan of $540 million. Deutsche Bank backstopped an $850-million share offering and Cerberus Capital Management LP bought $250 million worth of convertible preferred shares.

Milton says with a new business plan, the carrier is on its way to becoming profitable and competitive.

"We're now selling differently. About two-thirds of our domestic business is sold on the Internet at prices competitive with the low-cost carriers and we're able to do it profitably," Milton told Report on Business Television's Linda Simms.

"We're a very different airline now."

Milton admits it's been difficult to make the employee concessions he's made, but notes that airlines across North America have suffered in the three years since Sept. 11.

"I look at our position versus the carnage in the U.S. Our employees have come out of this very well. But it's tough. Change is tough. Getting through this is tough."

He adds that the airline is prepared to go head-to-head against the discount airlines, even if that means engaging in price wars.

"We are profitably operating with much lower fares. That's the way we designed this business plan," Milton. "And our position is we don't be undersold."