Canadian regional carrier PAL Airlines says it has signed a letter of intent with Air Canada to work toward operating regional flights under contract to the flag-carrier.

Currently, Jazz Aviation is the only provider of contracted regional services for Air Canada.

PAL says in a statement that the letter of intent is “a preliminary step towards the finalization of a commercial agreement between the two airlines for the provision of regional air services in eastern Canada.”

The proposed agreement, the final details of which are still being negotiated, would see PAL operate six De Havilland Canada Dash 8-400 aircraft under the Air Canada Express brand for up to five years.

“PAL Airlines has steadily built its extensive presence in eastern and Atlantic Canada by pursuing the strategic growth of sustainable, essential services that provide connectivity to national carrier networks,” PAL President Calvin Ash says in a statement.

“This proposed arrangement with Air Canada is a complementary extension of that strategy. It would support continued growth in our operation, deepen our ability to build regional connectivity and fortify PAL Airlines’ presence in the communities who have always supported our development,” Ash says.