In its first year following its transfer from the Israeli government to Knafaim Arkia Holdings, El Al reported the highest annual net earnings in its history, a $64.1 million profit that represented a 94% increase over 2004 earnings of $33.1 million.

Revenues rose 17% to $1.62 billion against a 9.7% decline in operating expenses to $1.2 billion. The airline said it realized $65 million in fuel hedge gains as fuel costs climbed 44% to $388 million. Operating profit jumped 53.7% to $89 million.

"It gives me great joy to see how diligently El Al's employees have dedicated themselves to reaching the objectives of this competitive commercial company," said President Haim Romano. "These impressive achievements are also, without a doubt, a direct result of El Al's investment in our route expansion, increased frequency, aircraft upgrades and improved customer service."

Load factor rose 2.5 points to 79.4%, which the carrier said came against increased competition as interest in travel to Israel has risen and the Civil Aviation Authority has authorized more flights into the country. El Al responded with an expanded route network. In the first three months of 2006 it added frequencies to several international destinations, and it launched twice-weekly service to Miami last week. It also upgraded its website, call center, premium seating and airport service.