Air Canada has already trimmed its capacity by 20 percent and is in the process of cutting 9,000 jobs.

Air Canada's fares were also subject to regulation by the government.

Air Canada has two classes of service, both business and economy, on most aircraft.

Air Canada's voting stake will now fall to 4 percent.

Air Canada's pilots went on strike last year, costing the company $130 million.

Air Canada said yesterday that it would cut 3,600 jobs by the end of the year.

Air Canada appealed the ruling, and a hearing had been set for next month.

Air Canada also said it was considering options for six more 767's.

Air Canada plans to start its own discount carrier by year's end.

Air Canada will also have options to buy 10 planes beyond that, starting in 2002.