UPDATE 3-One-time charges drag Air Canada to deeper loss

(Adds analyst comments, updates stock quote)

By Jeffrey Jones

CALGARY, Alberta, May 8 (Reuters) - Air Canada (ACa.TO: Quote, Profile, Research) posted a deep first-quarter net loss on Thursday as more than C$200 million ($198 million) in one-time charges masked better than expected operating results in the face of soaring fuel prices.

The charges included a C$125 million provision for an investigation by the European Commission, U.S. Department of Justice and the Canadian Competition Bureau into alleged anti-competitive cargo pricing by a number of airlines.

Air Canada, the country's biggest carrier, had said it would eventually put the provision on its books as risks of costs became greater.

It said it plans several initiatives to help withstand rising fuel costs as oil surged above $120 a barrel. They include parking older, fuel-guzzling jets and scrapping marginal routes.

That follows such other measures as boosting fares and charging customers for checking more than one bag.

"We will continue to assess the market's ability to continue to absorb higher fares and pass on, as much as possible, the higher commodity costs," Chief Executive Montie Brewer told analysts. "To date, our markets have been absorbing these increases, and our advanced bookings remain strong."

That and its fleet renewal have allowed it to maintain strong yields amid its own view that the U.S. market is descending into a "mild" recession.