Island Air, seeking to reduce its risk in the crowded interisland market, has signed a letter of intent to conduct mainland operations with an undisclosed party using the 78-seat Bombardier Q400 airplane that Island Air recently took out of service and two other Q400s ordered but not yet delivered.

Chief Executive Robert Mauracher confirmed the deal yesterday but said final contract negotiations were still being worked out, and he wasn't prepared yet to disclose the location of the operations or the routes that will be served.