India's Jet Airways, which is in talks with Etihad Airways for a potential stake sale, said that it had reduced its debt by about US$400 million since the end of last March, when debt stood at about 143 billion rupees (Dh9.86bn).
Jet said it planned to continuing reducing its debt and pay off about $400m (Dh1.46bn) in the next financial year.
Sudheer Raghavan, the chief commercial officer for Jet, said that the carrier had reduced costs by cutting the number of foreign pilots and replacing them with Indian pilots. On Friday, Jet posted a profit of 850m rupees in the quarter between October and December, compared with a loss of more than 1bn rupees a year earlier.
Airlines in India have faced a challenging operating environment amid competition, high fuel prices and taxes.
"All of our efforts on revenues, costs and [the] network side have resulted in turning around the airline operations," said Nikos Kardassis, the chief executive of Jet, commenting on the airline's results.
"This is despite higher fuel prices and [the] rupee depreciation impact that we have had in the last few months.
"We continue in our endeavour on cost cutting measures."
Etihad on Monday said that it planned to present the proposal for a deal with Jet to its board and would make a decision on whether to invest in the carrier within the next few weeks.
The Indian government opened up the aviation sector to foreign direct investment by overseas carriers only last September, allowing foreign airlines to buy stakes of up to 49 per cent.
The fortunes of one of Jet's rivals, however, seem to be diverging from its own.
Kingfisher Airlines yesterday posted a loss of 7.55bn rupees for the three months to the end of December, as the indebted Indian carrier's operations remain suspended and authorities have yet to renew its flying licence. Auditors for the airline noted in the quarterly report that the loss would have been greater, at 10.9bn rupees, had Kingfisher calculated its costs for major repairs and aircraft maintenance "in accordance with generally accepted accounting standards prevalent in India", and not added a deferred tax credit, which did not satisfy conditions for recognition, according to BK Ramadhyani & Co, the auditors.
The airline, which has never turned a profit since its launch in 2005, is estimated to have up to US$2.5bn of debt (Dh9.18bn), owing money not just to banks, but also to staff, oil companies aircraft leasing firms, and airports.
Kingfisher's fleet of aircraft has been grounded since the beginning of October, when labour unrest broke out over unpaid salaries. The Directorate General of Civil Aviation (DGCA) suspended its licence later that month.
The licence then expired at the end of the year. "Kingfisher has made significant progress towards complying with the DGCA's requirements," the airline said yesterday.
The airline is hopeful that it will be flying again by the summer, with plans to inject funds into the business from its parent company, UB Group. Some analysts, however, have raised doubts over whether it will fly again.