PAL Airlines Ltd. (“PAL Airlines”), a subsidiary of Exchange Income Corporation (TSX: EIF) (“EIC” or the “Corporation”), has completed a Letter of Intent (LOI) with Air Canada as 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 “agreement”).

The proposed agreement, which remains subject to final negotiations between the parties, would see PAL Airlines acquire up to six additional Dash 8-400 aircraft to be operated on behalf of Air Canada for a term of up to five years on regional routes in eastern Canada.

Routes operated by PAL Airlines, on behalf of Air Canada under the Air Canada Express brand, pursuant to the proposed agreement would be in addition to the existing PAL Airlines scheduled and charter network throughout Eastern and Atlantic Canada.

“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,” said Calvin Ash, President of PAL Airlines.” This proposed arrangement with Air Canada is a complimentary 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.”