A US travel company is betting its future on a novel means, developed in Dublin, of predicting future airline ticket prices.

Crystal International Travel Group, a New Jersey company whose stock trades on the American "over the counter" market, hopes to raise up to $3 million (€2.2 million) in the next year to introduce an innovative system allowing frequent travellers to lock in their airfares up to five years in advance.

The i-Fares system, developed by Dublin's Intellifares, a wholly-owned subsidiary of Crystal, uses techniques similar to those created to estimate the fair value of financial options, comparing historic and current airfare prices - and their volatility - to give travellers a guaranteed price.

The company has also begun to negotiate long-term pricing deals with airlines, beginning with Mexicana Airlines, which serves the key target market of timeshare property owners.

Intellifares' managing director Peter Dugan said that Crystal was taking a measured approach to the travel market: "Our first priority is going to be timeshare owners who live more than three hours' flight time from their holiday properties. They have already made the decision to travel regularly and control their holiday costs; we want to give them the chance to do the same with their flight costs."

For now, Crystal is focusing on timeshare owners on the US west coast, who have properties in Mexico, Hawaii, Canada and the Caribbean. The company will later turn its attention to regular business travellers and US college students, many of who will fly home three times a year for four years. Crystal does not expect to offer the i-Fares system outside the US in the next year.

I-Fares customers who make a five-year commitment will pay 10-20 per cent less than five times the current lowest ticket price for their seats, buying the right to fly in a specified week in each of the next five years.

Crystal has created an investment fund, to be managed by UBS, which manages the extra cash until it is required to purchase tickets. The company hopes to make its profits - and pay travel agents annual commissions - by managing the surplus cash so that annual investment returns exceed the growth of airfare prices.

As each year's flight nears, customers will be contacted by Crystal to confirm their travel dates and requirements. Customers will have the option of changing the number of tickets, named passengers and even destinations, paying or receiving the difference between their pre-booked ticket and the price after any changes.

These cash management, ticket purchasing and customer service functions will be conducted from Intellifares' Dublin office, which Mr Dugan expects to grow from three staff to more than 13 by the end of the year.

Crystal, which was formed when a group of private equity investors took over a listed cash shell in early 2006, hopes to raise up to $2.5 million in convertible debt financing over the course of the next year to roll out the i-Fares system across the US.