Although Cape Air has twice before set up operations far removed from its base on Cape Cod, the regional airline is considering a new island chain, Guam and the Northern Mariana Islands.

Airline executives are back in Hyannis after a fact-finding trip last month to Guam with its code-share partner, Continental Airlines [NYSE: CAL]. While no decision has been made on setting up the new service area, it could launch the service as early as the summer, said Michelle Haynes, communications director.

If Cape Air goes to Guam, it will be flying three ATR-42s, a 42-passenger aircraft. Cape Air is leasing the three planes from Continental. The first ATR-42 arrived last month and it already sports the airline's colors. She said they are negotiating to obtain two more planes. Fifty Cessna 402s make up its current fleet.

While Guam is not definite, she said, the three larger planes would be put to use in conjunction with Continental. Without the passengers Continental would feed to Cape Air, she said the carrier would not be able to fill the planes. The two carriers are exploring other locations where the three planes can be deployed; however, she declined to name the other possible sites

"Guam is a lot closer" to getting the go-ahead than any other location, Haynes said. "There is more focus on Guam than other areas where we are looking. Many pieces of the puzzle are falling into place quicker in Guam than in other areas. If everything works in our favor and we decided that Micronesia is indeed the next Cape Air destination point, we are looking at this summer."

In addition to Guam, Cape Air would fly to Saipan and Rota, both islands in the Commonwealth of the Northern Mariana Islands. The smallest of the three, Rota is 73 miles south southwest of Saipan and 47 miles north of Guam. Currently there are infrequent flights between the islands. Cape Air would provide at least one daily flight.

Continental, through its Continental Micronesia unit, flies to Guam from Tokyo, Honolulu and Los Angeles.

More than 1 million tourists visit Guam each year and about 500,000 visit the 14 islands of the Northern Marianas. The tourist industry has recently suffered setbacks because of the continuing Japanese economic slowdown; the Japanese normally make up almost 90 percent of the tourists.

"Under the Continental code-share, we would do it with all the assurances that you can in this industry that it would be a success," she said.

Cape Air would transfer some of its current employees to Guam to handle the flights. With the larger ATR, Cape Air for the first time would have flight attendants. "Many of our 500-plus employee-owners pack up their suitcases every September and move to St. Thomas or Tortola. It is one of the benefits of working for Cape Air. It is what we do."

Cape Air shifts it's a portion of its fleet from New England south to Florida and the Keys or to the Caribbean each fall. "Seasonal and counter-seasonal moving is a way of life for Cape Air."

While setting up shop halfway around the globe may sound daunting, Haynes said once you pave the way it works very smoothly. Shifting the assets to the Pacific is one of the logistical issues the carrier is now researching.

Cape Air first diversified it operations in 1993 when it started flying in Florida. It set up another winter operation in 1998 when it began flying to the Virgin Islands. When Cape Air begins a new service area, it maintains some flights year-round. "We just decrease the level of service in the off season. We are committed to the year-round community. We hope the seasonal business subsidizes the off season. For 15 years it has worked pretty well for us."

As the carrier continues to explore new service areas for the ATR, she said Cape Air is also exploring new markets that can be served by the nine-seater Cessnas. The possible expansion sites may include Vermont, Hawaii and the Bahamas. "We do well with the 30 minute hops. Our bread and butter are the geographically challenged - islands - with short stage lengths," she said.

>>Contact: Michelle Haynes, Cape Air, (508) 790-3122.<<