As Canadian airlines continue to pull back US capacity, Air Canada is expanding service in eastern Canada through an enhanced commercial agreement with PAL Airlines.
Under the proposed deal, PAL would operate more regional flights on behalf of Air Canada Express out of Montreal and into smaller markets across Quebec and New Brunswick.
The agreement would extend the current partnership by four years, through 2032, and increase the number of PAL-operated aircraft from six to 11.
"Air Canada is committed to regional connectivity," said Mark Galardo, Executive Vice President and Chief Commercial Officer and President of Cargo at Air Canada. "Our proposed agreement with PAL Airlines will enable us to protect existing services from Montreal to destinations in Quebec and New Brunswick and support the overall growth of our regional network."
PAL Airlines has flown for Air Canada Express since 2023, operating Dash 8-400 turboprops on short-haul routes.
"It has proven to be a strong partner, offering our customers in eastern Canada reliability, excellent customer service and a greater choice of flying options,” said Galardo.
Calvin Ash, President of PAL Airlines, added "this proposed extended arrangement with Air Canada reflects their confidence in our operation, supports the continued growth of our airline, and will solidify our presence in the regions which have supported our development.”
The letter of intent between the two airlines remains subject to final negotiations.
News of the Air Canada-PAL interline expansion comes after Ottawa and the Maritime provinces committed $9 million to PAL Airlines to operate twice-daily service between Halifax, Sydney, Charlottetown, Fredericton, and Moncton.
As reported by Open Jaw in August, the three-year pilot program, jointly funded by New Brunswick, Nova Scotia, PEI, the Atlantic Canada Opportunities Agency, and regional airports, aims to address a long-term decline in regional service between Maritime airports post-pandemic.
