Air Canada flights from Billy Bishop Airport will take off in early 2011 and Montreal is the first stop, the company said.

The airline announced Monday afternoon that it had settled the terms of a long-term Commercial Carrier Operating Agreement (CCOA) with the Toronto Port Authority and as of February 2011 will offer up to 15 daily, non-stop flights from the island airport to Montreal Trudeau International Airport.

“These arrangements mark solid progress as we work to develop a unique product tailored to meet the diverse needs of travelers between Canada’s two largest cities,” said Ben Smith, executive vice president and chief commercial officer, in a statement.

The fleet of five Bombardier Dash 8 Q400 turboprop aircrafts that will be used on the route will be subleased and operated by Sky Regional Airlines Inc.

The terms and conditions of the lease agreements should be finalized in the coming weeks, the company said. That includes an agreement with City Centre Terminal Corp. (CCTC) to lease space at the terminal.

Air Canada's regional Jazz unit was evicted from the island in 2006 after Robert Deluce, president and CEO of Porter acquired a controlling interest in Toronto City Centre Aviation.

In June, Air Canada and Houston-based Continental Airlines were given initial approval to operate out of the island airport.

Porter already operated 112 of the available 202 slots and a consulting firm hired by the port authority allocated 44 new slots to Porter, 30 to Air Canada and 16 to Continental.

Air Canada challenged the decision but a federal judge dismissed proceedings that alleged the port authority had acted unfairly when it divided available landing spots at the island airport.

Read more about: