NEWARK -- On Friday, Kiwi Airlines announced that higher fuel costs and the aftermath of the ValuJet crash dragged down its second-quarter earnings by 41 percent, though it did report some good news: Two of its four grounded planes have been cleared for takeoff.

Kiwi also reported that the California investment group that pledged to inject up to $10 million in the ailing airline has infused an additional $2 million, bringing its total stake to $4 million.

"The $2 million will be used as working capital,'' said Jerry Murphy, Kiwi's president.

For the second quarter of 1996, Kiwi, which flies to Bermuda from Newark and Atlanta, reported earnings of $1 million, down $700,000 from the previous year. Revenues were $53.4 million compared with $43.9 million in the second quarter of 1995. Expenses rose 24 percent to $52.3 million from $42.2 million.

But the reduced net income still represents a milestone: Kiwi's third consecutive quarter of profitability.

Murphy said lower fares and higher fuel costs dragged earnings down.

"Obviously, the aftermath of the ValuJet incident and then the grounding of the aircraft in May and June has had an impact'' on revenues, he said.

On June 21, the Federal Aviation Administration grounded four of Kiwi's 15 planes because of questions about training and record keeping.

In a phone conference on Friday, Murphy said he estimates the potential lost revenue from the grounding to be "somewhere in the neighborhood of $2 million to $4 million.'' Kiwi will meet with the FAA again next week, Murphy said, at which point he expects the remaining planes to be cleared.

"I would just like to put this behind us,'' he said. "I think we will put all of that to rest by the end of next week.'' In July, Kiwi flew without a backup plane, causing delays and cancellations, Murphy said.

"But overall, we were able to get all of the customers to their destinations,'' he added. By August, he said, "I think they will see Kiwi back to its former status.'' Murphy said that in the next week, the airline also will recall employees from furlough or leaves of absence. The final number recalled has yet to be determined and depends on August bookings, he added. About 20 workers went on furlough, and about 75 more elected to take unpaid leaves of absence, he said.

Employees also took a ten percent pay cut, which Murphy said he hopes to restore by August 10.

The additional $2 million investment in Kiwi will give Recovery Equity Investors of San Mateo, California, a stake ranging from the 40 percent to 60 percent of ownership, Murphy said. That percentage will vary depending on the number of shares and options owners and stockholders choose to hold or exercise.

As part of the arrangement, the group also assumed two seats on the board of directors.

David Stamey, the vice president of aviation consulting at Avitas, a Reston, Va., airline consulting company, called the California group's investment in Kiwi "a necessary cash infusion'' to ensure the carrier's survival.

Even if a portion of control is ceded, it will at least preserve the jobs and investments employees hold with Kiwi, Stamey said.

With a series of management changes, a troubled financial history, and the "stigma'' of being a start-up, Kiwi has been tentatively clinging to life, even with recent improvements, Stamey said.

And while Kiwi picked up some of ValuJet's passengers in the wake of that carrier's May 11 crash, all of the start-ups have been hurt by the accident and the resulting increased scrutiny of start-ups.

Stamey said it is true that with Kiwi's full service and seasoned crew, it's not lumped with some of the other, no-frills start-ups. But, he said, passengers still will be more wary with Kiwi than they would with more established carriers.

And the grounding really hurt occurring when it did, "right in the middle of the summer when they should be making their profits,'' he said.

Still, he added, "I consider it to be quite something that they could attract an additional investment of that kind,'' Stamey said. "Someone believed the airline was a viable entity,'' he said, though he himself is sceptical. Said Stamey, "I don't understand why they would have done it.''