Ryanair is expanding its base at Frankfurt-Hahn in Germany in a move that the airline claims will amount to a $1 billion (€854 million) investment.

Ryanair chief executive Michael O'Leary said that the investment, which could create as many as 5,000 jobs, should have gone into Dublin airport instead.

Starting in 2006, Ryanair plans to increase the number of aircraft it has based at Frankfurt-Hahn to 18 from the current six, and double the number of routes it serves to more than 50.

This will enable Ryanair to carry as many as eight million passengers a year at the airport, which is situated about an hour's drive from Frankfurt, compared to the current three million.

According to industry figures, for every one million passengers carried, about 1,000 jobs are created in the local community.

The investment will propel Frankfurt-Hahn to overtake Dublin as Ryanair's second largest base in terms of passenger numbers. London-Stansted is its biggest.

Announcing the investment, Mr O'Leary said the Government's refusal to accept his proposals to build a second competing terminal at Dublin airport had forced Ryanair to expand in Germany rather than Dublin.

Mr O'Leary has constantly criticised the Government's decision to allow the Dublin Airport Authority, which operates the existing terminal, to build a second site and has campaigned aggressively for an independent terminal.

During the second part of the German investment programme, starting in 2008, Ryanair will also provide a €12.5 million loan to help fund a €25 million expansion of the airport to cater for the increased number of passengers.

Ryanair on Tuesday reported a better-than-expected 18 per cent increase in first-half profit and said that it may carry more passengers than the 35 million it had originally targeted for this financial year. The stock rose 28 cent to €7.25.