TORONTO — Shares of the new Air Canada pushed higher as they began trading Monday, gaining more than 25 per cent from their issue price of $20.

ACE Aviation Holdings voting shares were up $5.39 to $25.39 late in the morning on the Toronto Stock Exchange. The shares had changed hands at about $26 on the grey market before trading began on the TSX.

The airline's restricted-voting shares for foreign stockholders were up $5.40 to $25.40.

The Montreal-based airline's creditors received the shares in exchange for billions of dollars in debt as part of Air Canada's 18-month restructuring under creditor protection.

The restructuring reduced the airline's debt from $12 billion to $5 billion, and ACE -- Air Canada Enterprises -- has $1.9 billion in cash on hand.

Analyst expectations for the ACE shares vary widely: an RBC Capital Markets commentary set a one-year price target of $49, while Research Capital has a one-year price target of $15.30.

Dlouhy Merchant analyst Cameron Doerksen put a one-year price target of $30 on the stock with a "speculative buy'' rating.

"Although the high cost of fuel is burdening the whole industry, strong demand for air travel on both international and domestic routes, a significantly reduced cost structure and a vastly improved balance sheet all position Air Canada for a return to profitability in the near term,'' Doerksen wrote in a research note.

Along with the improvements of a reduced debt and lower labour costs, Doerksen said investors could benefit from expected spinoffs of Air Canada affiliates like Aeroplan or the Jazz regional division.

In addition, he said, international air travel is rebounding.

ACE Aviation Holdings is the parent company under which the reorganized Air Canada is held, along with separate legal entities representing the Aeroplan loyalty-points scheme, Jazz, the Destina.ca travel-planning website, the Touram vacation packager and individual segments for technical services, cargo and ground operations.

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