Ryanair is to establish a major hub in the Lithuanian city of Kaunas, its first in Central and Eastern Europe.

Ryanair will 102 million euro into the project, CEO Michael O'Leary told reporters in Vilnius, Lithuania's capital.

He added that Ryanair would introduce 18 new routes from Kaunas and employ 150 pilots and flight attendants to serve them.

Ryanair has been searching for a hub in Eastern Europe for several years, and Mr O'Leary said the discount carrier chose Lithuania because of its attractive business climate, good infrastructure and rapidly growing passenger numbers.

Kaunas authorities slashed airport taxes last year after Lithuania's main carrier, flyLAL, was forced into bankruptcy, depriving the country of its own airline.

Ryanair will allocate two new Boeing 737-800 aircraft to the Kaunas hub, Mr O'Leary said. He said he expected passenger numbers at the Kaunas airport to more than double this year to one million. The hub is also expected to create 1,000 jobs.

Kaunas, an hour's drive from Vilnius, is Lithuania's second city but has one of the highest rates of joblessness in the Baltic state of 3.4 million people.

Mr O'Leary said Ryanair was considering opening other hubs in Eastern Europe.