Brazil's embattled airline Varig has named Manuel Guedes, until now the company's investor relations director, as its stand-in president following the resignation of the entire board earlier this week.

Mr Guedes said he would immediately start talks with the country's national development bank BNDES over a possible aid package to save the debt-laden group from bankruptcy.

The board stepped down at the start of the week following a decision by its largest shareholder, the non-profit Rubem Berta foundation, to reject plans to postpone a debt repayment while a new restructuring plan was agreed.

But the interim president sought to reassure staff and the market on Wednesday.

"Varig is viable and will continue being viable," said Mr Guedes.

Pay day

Varig - full name Viacao Aerea Rio-Grandense - is Brazil's flagship airline.

But it was told by the Brazilian government on Tuesday that it would only receive state aid if it could indeed prove that the company had a solution to its crippling debt problems.

They've all said this before and all that happens is a change in leaders

Michael Miller, Miller Air Group

Analysts have estimated the debt to be as high as $900m but Mr Guedes insisted the actual figure was nearer $700m.

Some of the companies owed money by the airline are state-run companies such as BR Distribuidora, the gas group, Banco do Brasil and the aviation regulator Infraero.

Private investors include the US group GE Capital and local banks Unibanco and Banespa.

The creditors agreed in October to let Varig postpone its repayment of $118m debt while the airline finalised a restructuring plan.

But the Rubem Berta Foundation turned down a proposed deal on Monday, prompting the board's resignation.

'Next!'

Critics of Varig have complained that the company will have to take dramatic action to dig itself out of trouble.

Mr Guedes is the company's fourth chief in three years.

And Michael Miller, president of Orlando-based aviation consultancy Miller Air Group remained sceptical of the new leader's plans to renegotiate the terms of Varig's debt.

"They've all said this before and all that happens is a change in leaders. They have to be serious about restructuring if they want a Brazilian airline to be the continent's leader."