Aer Arann plans to spend €8 million over the next five years on a new reservations, online booking and check-in system.

The new system will allow the airline, which now serves 16 destinations in the Republic and Britain, to offer ticketless travel. The system is known as the Navitaire Open Skies system. It is used by 40 airlines around the world, including Ryanair, MyTravelLite, Virgin Express and Air 2000.

Ms Jennifer Mooney, commercial manager at Aer Arann, said: "This represents a significant investment for Aer Arann. The Open Skies system will provide real benefits for our customers in a variety of ways, but particularly for those booking online.

"In the coming months we will be introducing a number of web fare promotions, allowing passengers to travel for lower than ever before."

Aer Arann has a turnover of €60 million and hopes to carry 650,000 passengers this year.