Lithuanian authorities are aiming to establish a new carrier to serve the Baltic state as it takes over the presidency of the European Union next year.
Air Lituanica will be based in Vilnius and intends to open services initially to around five destinations, including Brussels. It has also tentatively selected Amsterdam, Kiev, Moscow and possibly Paris or London.
Lithuania will preside over the European Union for the second half of 2013.
The carrier plans to start with a pair of Embraer 175s, configured with some 86 seats, and double the fleet over the first five years.
It intends to offer a service which is "between low-cost and that of general airlines", says a senior source close to the project, adding that the management team is "finalising the business plan".
Air Lituanica hopes to have operational clearance by February 2013.
Vilnius's local city municipality is envisioned as a shareholder in the carrier along with several private investors.
Lithuania has struggled to retain a home airline since flag-carrier Lithuanian Airlines, rebranded as FlyLAL, ceased operations in 2009 - although an associated charter operation evolved into Small Planet Airlines.
Air Lituanica has identified other potential destinations to develop its network after the start-up phase, including Stockholm, St Petersburg, Berlin, Munich and Istanbul.