(AFP) Struggling Jet Airways, one of India’s biggest airlines, reported Friday a quarterly profit for the first time in two years, boosted by a one-off gain from the sale of a frequent-flyer scheme.

The Indian carrier, in which expanding Gulf airline Etihad Airways has bought a 24-percent stake, remained in the red when the sale proceeds were stripped out, but still improved its operating performance markedly.

Jet announced a 698-million-rupee ($11.3 million) net profit for the second-financial quarter to September in contrast with a 8.9-billion-rupee net loss in the same year-ago period.

“I am extremely pleased by the progress,” Jet Airways recently appointed chief executive Cramer Ball, known as a turnaround specialist, said.

The publicly traded airline, which last reported a quarterly profit in 2012, has been seeking to pilot its way back to profitability in India’s congested skies.

While India’s passenger aviation market is one of the fastest-growing globally, cut-throat fare wars and too many carriers mean most of the country’s airlines are losing money, analysts say.

Stripping out the 3.05-billion-rupee earnings from the sale of its frequent flyer scheme, Jet lost 2.35-billion rupees, but this was still a vast improvement from the airline’s year-earlier loss.

Revenues climbed by 13.7 percent to 6.13 billion rupees, said the statement released after financial markets closed.

“This (result) is in keeping with our three-year turnaround plan,” Jet’s chief executive said.

Cramer in July forecast that Jet would return to annual profit in 2017 through cost-cuts, route-sharing with new partner Etihad and restructuring hefty debt.

“Restructuring initiatives with route and network rationalisation are already yielding dividends,” Cramer said of the quarterly results.

Jet is also phasing out chronically money-losing budget-flight operations by December to become a full-service airline.

Indian airlines’ bottom lines also will get some relief in months ahead from sharp reductions in jet-fuel prices, which account for as much as 40 percent of operating costs.

India cleared last May the Abu Dhabi airline’s purchase of the Jet stake for 21-billion rupees ($330-million).

Etihad has spent over $1 billion over the last two years buying stakes in ailing airlines in a global expansion drive, including the 49-percent acquisition of Italian flag-carrier Alitalia, now in its final regulatory approval stages.

Etihad’s Jet buy came after India relaxed foreign ownership rules to allow overseas carriers to purchase up to 49 percent of local airlines.

Deep-pocketed Etihad is hoping to utilise Jet’s network as a springboard to earn money from rising passenger traffic from India to the Middle East and beyond.

Etihad chief executive James Hogan told a New Delhi business audience ahead of the earnings announcement the Jet purchase was “a long-term investment”.

“We knew it would be a long journey” winning regulatory clearance, Hogan said, due to infamous red-tape India’s new government has promised to reduce to spur a sputtering economy.

But now “I can tell our stakeholders… the investment is safe,” Hogan said.

SOURCE, AFP