"The BJP-led government is the first government to have openly said that it is in favour of disinvestment in the national carriers. This is a revolutionary step," said civil-aviation minister Ananth Kumar at the Economic Editors' conference here on Wednesday.

While the divestment in IA will be as per the Kelkar committee recommendations, AI's disinvestment will be along the lines suggested by the Disinvestment Commission, the minister announced.

The centre will start with a financial and organisational restructuring of the two airlines. The divestment process will see the appointment of an international consultant to identify a strategic partner for Air India.

The minister said that he has held a series of meetings with the AI and IA management and unions over the past few months on the exact nature of the disinvestment.

Kumar emphasised thathis ministry favoured complete rationalisation of the civil-avaition sector by reducing costs. "I favour democratisation of civil aviation. Aviation is still an elitist sector in the country. By connecting regional metros through airlines, this elitis tag can be removed" said Kumar.

The minister said that while the parking and landing fees at airports will be slashed, several other factors have contributed to the very high operating costs in the aviation sector.

"Operating costs of flying in India are 86 per cent of total costs. This is of serious concern to us," said Kumar. The civil-aviation ministry is in talks with the finance ministry for a reduction in operating costs to 65 per cent. Among the various issues being discussed between the two ministries is the reduction of witholding tax and inland air-travel tax.

Kumar has also approached the ministry of petroleum for dismantling of the administered price mechanism for aviation turbine fuel (ATF). "The high cost of ATF for domestic airlinessubsidises kerosene," said Kumar.