The airport's managing director, Liam Scollan, said he believed the funding, which will see the airport's passenger facilities expanded and the installation of a radar system on a par with Cork airport's, would make it easier to attract such business.

"Airlines overseas are already looking at this investment and see it as a vote of confidence in the airport, " he said. However, Scollan ruled out any attempt to attract US military flights.

"This investment is in no way connected with any such plans. We have no plans to attract military operations that do not have the support of the UN and the Irish government, " he said.

He said its priority was to build its passenger business so it could achieve its target for handling one million passengers a year by 2010. He said the airport planned to achieve this by attracting more transatlantic business.

Scollan also said Ireland West wanted to become an international aviation hub for the west of Ireland which would "provide connectivity to the west coast US and the Middle East" and would count major airlines among its clients.

The airport had applied for Euro35m in government funding towards its current investment programme under the NDP, which leaves it with a shortfall of Euro8m. Scollan said this would mean that some elements of the airport's plans, such as improving its car parking facilities, building new access roads and enhancing its freight facilities, could not go ahead immediately. However, he said the airport's board was confident that its investors would make up the shortfall.

"Anyway, to get Euro27m is an excellent result and our current aim is not to look for more but to invest this money as quickly and as effectively as possible, " he said.

Scollan's comments come a month after Scottish carrier Flyglobalspan confirmed it would begin transatlantic flights from Knock airport this May.