Air Canada filed the paperwork Monday for a $200-million initial public offering that will allow investors to directly buy stock in Canada's biggest airline.

The IPO, which was announced in August, will include Class A variable voting shares and Class B voting shares.

The airline, which came out of bankruptcy protection just over two years ago, also said its parent company, ACE Aviation Holdings Inc., will issue a secondary share offering. But it wouldn't say how big the secondary offering would be.

ACE will retain majority ownership of the country's biggest airline. Air Canada will use the proceeds from the IPO for general purposes, including the renewal of its fleet.

"The launch of Air Canada's initial public offering represents a major milestone in ACE's strategy of maximizing shareholder value by surfacing the underlying value of its subsidiaries," said Robert Milton, ACE's chairman, president and CEO.

"Since Aeroplan and Jazz became publicly traded companies in June 2005 and February 2006, both businesses have developed well as stand-alone companies with outside investors and delivered strong financial results. We expect Air Canada to benefit in a similar way as we move ahead," he said in a release.

Air Canada also said it will take a $102-million non-cash charge in the third quarter to cover an agreement with Aeroplan Ltd. Partnership that will see Air Canada assume responsibility for the redemption of up to 112 billion frequent flyer miles.

Shares of ACE Aviation Holdings rose $1.22 on Monday to close at $36.38 on the TSX.