Continental Airlines has posted a 2006 net income of US$343 million, marking a return to the black after reporting a net loss of $68 million in 2005.

The 2006 net income includes a $92 million gain on the sale of a portion of the company's investment in Copa Airlines and net earnings of $53 million from other special items.

Excluding special items, Continental's net income for the full year was $304 million, compared to a net loss of $205 million, excluding special items, for 2005.

The 2006 net income improvement came on the back of strong revenue growth, which was up 17.1 per cent year on year, and continued cost reduction initiatives, a company statement said.

"In 2006, we grew revenue at almost twice the rate we grew capacity, and we grew mainline capacity more than any of the other major network carriers," said Continental president Jeff Smisek.

Continental reported a fourth quarter 2006 net loss of $26 million, including a special charge of $22 million related to lump-sum payments to retiring pilots. Excluding the special charge, Continental recorded a net loss of $4 million.

Operating income for the three months ended December 31 was $20 million, which Continental described as the largest fourth quarter operating income since 2000. This was an improvement of $114 million over the same period in 2005.

A breakdown of the results show that operating revenue from cargo amounted to $122 million in the fourth quarter of the 2006 calendar year, up 3.4 per cent compared to the same quarter in 2005. Cargo operating revenue for the whole of 2006 rose 9.9 per cent over 2005 to $457 million.

Continental ended the fourth quarter with approximately $2.48 billion in unrestricted cash and short-term investments.