Air Canada Doubles Down on Regional Strength with Major PAL Airlines Expansion

MONTRÉAL, QUÉBEC – In a strategic move to fortify its presence in Eastern Canada, Air Canada has officially announced its intent to significantly expand and extend its commercial partnership with PAL Airlines. As of January 8, 2026, the two carriers have signed a Letter of Intent (LOI) that not only secures regional connectivity for the next decade but also introduces a substantial fleet expansion to meet rising demand in Québec and the Maritimes.

The agreement, which originally saw PAL begin operations for Air Canada Express in 2023, is set to be extended by an additional four years, pushing the partnership horizon to 2032. This deep-rooted collaboration is designed to act as a vital lifeline for smaller communities, ensuring they remain tethered to Air Canada’s vast global network via its Montréal (YUL) hub.

Five More Dash 8-400s to Join the Fray

The most striking element of this expansion is the nearly 100% increase in the dedicated fleet. The number of PAL-operated aircraft flying under the Air Canada Express banner will grow from six to eleven Dash 8-400 turboprops. These high-speed, fuel-efficient workhorses are perfectly suited for the rugged geography of Eastern Canada, offering the capacity of a regional jet with the operational flexibility required for shorter runways.

According to the official announcement from Air Canada:

“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. 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.” 

       - Mark Galardo, Executive Vice President and Chief Commercial Officer, and President of Cargo at Air Canada.

Calvin Ash, President of PAL Airlines, echoed this sentiment, stating:

“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 "Eastern Hub" Strategy

While the airline industry has seen a recent pullback in U.S. transborder capacity, Air Canada is pivoting its focus inward to protect the domestic feeder network. The expansion will specifically target routes between Montréal (YUL) and critical regional hubs in Québec and New Brunswick. By increasing frequency and capacity on these routes, Air Canada ensures that passengers in smaller markets have seamless, same-day connections to the airline’s newly announced 2026 international routes.

Future Air Operations

While the PAL Airlines expansion secures the regional foundation, Air Canada is simultaneously launching a massive global offensive for the Summer 2026 season. Below are the brand-new air operations slated to take flight, providing the long-haul connections that the PAL regional network will feed into.

The Profound Impact

For the traveller in Saint John or Gaspé, this news is about more than just aircraft tail numbers. It is about the preservation of essential mobility. In a country as geographically vast as Canada, regional aviation is the thread that holds the social and economic fabric together. By extending this agreement to 2032, Air Canada is sending a clear message: the "regional" is just as critical as the "global."

As the five additional Dash 8-400s enter service, passengers can expect increased reliability and more flexible scheduling, effectively turning the "St. John’s to Shanghai" dream into a tangible, two-stop reality.