MUMBAI: Shareholders of India's Jet Airways on Friday approved a deal in which Abu Dhabi-based airline Etihad will take a 24 per cent stake in the private carrier, media reports said.

Jet shareholders approved the proposed issue of shares on a preferential basis to Etihad, at an extraordinary general meeting held in the city, the Press Trust of India agency said.

Shares will be allotted only after completion of all regulatory approvals.

“The commercial agreement with Etihad will help us to expand network, reduce costs and increase profitability,” Jet's chairman Naresh Goyal reportedly told shareholders. Jet officials were not immediately available to comment.

The Jet-Etihad deal, announced in April, is the first overseas investment in an existing Indian carrier since New Delhi eased restrictions in September to allow foreign firms a 49 per cent stake in the country's airlines.

Jet is India's second largest airline, with a 22.6 percent market share, according to the country's civil aviation regulator.

For the three months to December 2012, Jet reported a net profit of 850 million rupees ($16.03 million), from a net loss of 1.01 billion rupees a year earlier, aided by rising fares and lowering costs.

India is one of the biggest aviation markets in the world as its large and growing middle-class scrambles for air travel, spurred by rising incomes.

But the sector, once vaunted as a symbol of India's economic vibrancy, has seen its fortunes fade in the face of aggressive fare rivalry, a slowing economy, rundown infrastructure, high airport charges and expensive fuel.