Air Canada had debts of �4.9bn

Creditors gave their overwhelming support on Tuesday to a plan to restructure Canada's national airline at a meeting in Montreal.

The airline was given protection from creditors, a procedure which is part of Canada's bankruptcy code and is similar to Chapter 11 in the US, in April 2003.

The firm's survival plans include cutting 25% of its 40,000 workforce.

Air Canada's emergence from creditor protection is expected to be officially sanctioned at a court hearing on August 23.

Going forward

99% of creditors approved the airline's proposals, under which they will take a 45.8% stake in a new company, Air Canada Enterprises Aviation Holdings.

Air Canada chief executive Robert Milton said: "This positive response from creditors represents by far the most critical vote of confidence in the strength of our business plan and the airline's prospects going forward."

The airline's restructuring is being financed by a US$637m (�348m) issue of new shares and a US$1.8bn(�985m) loan from GE Capital Aviation Services.