Air Canada looks set to extend a commercial agreement under which PAL Airlines operates regional flights for Air Canada Express.
On January 8, 2026, the airline partners announced that an existing agreement is to be extended by an additional four years to 2032. The number of PAL Airlines aircraft covered by the contract is expected to grow by five, to a new total of eleven.
Air Canada and PAL Airlines have signed a letter of intent which is subject to final negotiations between the two parties.
Mark Galardo, Executive Vice President and CCO, and President of Cargo at Air Canada, said: “Air Canada is committed to regional connectivity. Our proposed agreement with PAL Airlines will enable us to protect existing services from Montréal to destinations in Québec and New Brunswick and support the overall growth of our regional network.”
He added: “Since PAL Airlines began operating for Air Canada Express in 2023, 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.”
Under the agreement, PAL would increase its cover fleet by five additional Dash 8-400 aircraft on behalf of Air Canada on regional routes.
“PAL Airlines is proud to work on expanding our agreement with Air Canada, growing our considerable presence in Eastern and Atlantic Canada by delivering flexible solutions that support regional connectivity for the Air Canada network,” said Calvin Ash, President of PAL Airlines. “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.”