Ronald Wright, the airline's director of sales and marketing-Hawaii, said at a news conference in Gov. Ben Cayetano's office yesterday, that the move will make operations in the Western Pacific, Asia and mainland-Hawaii routes more flexible for Continental and its subsidiary, Continental Micronesia.

Cayetano said the change will bring about $8 million a year in payroll into the Hawaii economy. He said the boost here runs counter to what has been a trend of companies moving out of Hawaii.

Wright said the change will help prepare Continental for what it hopes is a big expansion into Japan.

"It's not exactly a precursor to adding a lot of new flights, but it does allow Continental a lot of flexibility," Wright said. Continental has applied for added flights between Japan and Hawaii and that flexibility would help if they come through, which could be as early as next year, Wright said.

Continental is seeking government approval to double its Tokyo-Honolulu service to two Boeing 747-200 flights a day. It also wants new McDonnell Douglas DC-10-30 service to Honolulu from Sendai, starting with four flights a week and eventually reaching seven.

And Continental is pushing for activation of rights it says it already has to fly daily between Osaka and Honolulu. Most of those flights are subject to a new Japan-U.S. aviation agreement, yet to be negotiated.

Meanwhile, it makes sense for Continental to expand here, Wright said. "Most of the DC-10 pilots are in Los Angeles. That base will move in its entirety to Honolulu," he said.

Continental will also strengthen its 747 base in Honolulu. The 747 pilots flying the Pacific-Asia routes are mostly based in Guam but some of them will move to Honolulu, Wright said.

Continental began flying from the mainland to Hawaii and Asia as a U.S. transport operation in the Vietnam War. In 1969, in a major U.S. air routes award, it was one of six U.S. airlines granted rights to the mainland-Hawaii route then served only by United Airlines and Pan American World Airways.