The Indonesian Government has appointed Robby Djohan, the new president of national carrier Garuda, as part of a shake-up of the financially stricken airline's board of directors, senior management and operations.

Djohan is a relative newcomer to the airline industry, having previously headed Citibank Indonesia and Bank Negara. Observers describe him as a "quick learner" and "sharp on finances".

He inherits from former Garuda president Soepandi an airline which is teetering on the edge of bankruptcy, laden with $200 million debts and surplus capacity.

One of his first moves has been to announce plans to reduce Garuda's fleet from 57 to 30 aircraft. Most of the aircraft targeted for disposal are leased and are a major drain on the airline's finances because of the 80% slide in the value of the rupiah to the US dollar.

Another pressing issue still to be resolved is the fate of 12 remaining 737-300/500s ordered by the carrier, seven of which have already been completed and stored in the desert. Sources suggest that the airline may, in the end, take 10 of the aircraft with support from the Indonesian Government and the US Exim bank.

In the meantime, Garuda and Indonesia's four surviving domestic carriers, Bouraq, Dirgantara, Mandala and Merpati Nusantara, have agreed to pool their resources on domestic routes following the collapse of rival Sempati. The five carriers are to form a consortium that will share aircraft, routes, ticketing and revenue.

"The aim is simply to survive," says Soelarta Hadisoemarto, chairman of the Indonesian National Air Carriers Association and architect of the plan.

Source: Flight International