Shares of the restructured Air Canada fell below their initial public offering price Friday as the airline's stock made a shaky market debut. 

The Class A shares were down $1.25 to close at $19.75 on volume of more than 11 million shares. The Class B shares dropped $1.42 to $19.58 on trading of 1,289,000 shares.  

Air Canada shares return to TSX for first time since old stock was delisted in August 2004.

Reports indicated the offer was heavily oversubscribed.

ACE Aviation Holdings, the parent company of Air Canada, priced the IPO late Thursday at $21 a share for 25 million shares. 

Air Canada raised $200 million through the IPO, while ACE raised another $325 million for itself through the sale of shares it holds.

The $525-million total exceeded the $400 million underwriters were originally planning to raise.

ACE also agreed to grant underwriters an over-allotment option to buy up to another 3.75 million shares.

The parent company said it expects to retain control of Air Canada with a 75 per cent stake. If the underwriters take their full over-allotment option, ACE's stake will slide to 71.25 per cent.

When the public offering is done, Air Canada is expected to have about $2 billion in cash and cash equivalents, plus $400 million in a senior credit line.

After a restructuring under bankruptcy protection, the airline re-emerged in 2004 with ACE as its publicly traded parent firm. ACE has since spun off stakes in the Aeroplan loyalty program and regional air carrier Jazz.

ACE has also said it wants to spin off its Air Canada Technical Services maintenance and repair unit.