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ational flag carrier Garuda Indonesia announced on Friday a management shake-up, with six members of the firm's board of directors and five members of the board of commissioners dismissed amid difficult financial conditions.

Arif Wibowo, the former CEO of Garuda's low-cost unit Citilink, was appointed as the new president director, replacing Emirsyah Satar, who stepped down from his post on Dec. 8 after serving two terms from 2005. Emirsyah's term had been extended to March 2015, but he resigned early.

Speaking following his appointment after the firm's extraordinary shareholders meeting, Arif said the airline would continue to face 'strong headwinds' next year because of the depreciation of the rupiah against the US dollar, and despite declining global fuel prices.

Garuda, said Arif, needed to generate more revenue, restructure its cost drivers and ensure that the airline was financially secure next year, as the country's overall economy is predicted to stagnate and competition will become fiercer with the implementation of the ASEAN open sky policy.

'The firm has been experiencing heavy turbulence over the past year. Even though the declining price of avtur [aviation turbine fuel] has had a positive impact on the industry, we need to anticipate the continued depreciation of the rupiah against the US dollar,' he explained.

Under Emirsyah's leadership, Garuda won World Airline Awards including World's Best Regional Airline 2012 and World's Best Economy Class 2013. But despite its successful brand development, the publicly listed airline has suffered losses over the past year, with its comprehensive losses amounting to US$206.4 million in the first nine months of the year, skyrocketing from the $32.54 million recorded in the same period last year.

It took Garuda's stocks a year and a half to get back to their 2011 initial public offering (IPO) price of Rp 750 apiece, and the prices have been trading below that level until now, reflecting its poor financial performance.

Arif, who is currently the chairman of the Indonesian National Air Carriers Association (INACA), assumed the Citilink CEO position in 2012 after working at Garuda for over two decades, starting with an engineer staff position in 1990.

Arif succeeded in turning over Citilink's financial position to book a profit this year, despite tough competition in the domestic airline industry, according to Gerry Soejatman, an independent aviation consultant based in Jakarta.

Citilink booked $3.8 million in net profit from January to September this year, compared with a $5.6 million net loss reported in the same period last year.

Gerry said Arif's background at the low-cost carrier would help Garuda improve efficiency and prepare for the upcoming open sky policy, which will bring more competition to the industry in the shape of airlines from other countries in the region.

INACA secretary-general Tengku Burhanuddin praised the appointment of Arif as Garuda's new CEO, saying the flag carrier needed to be led by someone with an extensive background in the airline industry. 'With challenges ahead, there's no time for someone from outside the company to learn about the airline industry from the start,' he said.

At Garuda, Arif will work with three new directors, namely Iwan Joeniarto, who previously served as PT GMF AeroAsia's line operation director, I Gusti Ngurah Askhara Danadiputra from PT Pelabuhan Indonesia III (Pelindo III) and Handayani, a former director of life insurance firm PT AXA Mandiri Financial Services.

Two members of Garuda's board of directors, Heriyanto Agung Putra and Novianto Herupratomo, remain in their positions.

Five members of the firm's board of commissioners were also dismissed. The firm's president commissioner, Bambang Susantono, who is also a former deputy transportation minister, was replaced by former transportation minister Jusman Syafii Djamal.

'[The shake-up] is intended to rejuvenate the firm. There's a reason behind this,' state-owned enterprises minister's aide Dwijanti Tjahjaningsih said.