SURABAYA - AirAsia will offer monetary compensation to family members of victims of the ill-fated flight QZ8501 and is conferring with families individually to show its "good intention", the Wall Street Journal has reported.

The airline has offered an initial compensation of US$24,000 (S$ 32,000) to next of kin of each passenger on the Airbus which went missing on Dec. 28 and whose remains have been found in the Java sea. Of the 162 people on board, no known survivors have been found.

Some families have declined the offer without further information about compensation, citing confusion over the wording of the letter and reservations about the airline's practice of approaching families individually, the WSJ report said.

On Tuesday, Capt. Raden Achmad Sadikin, AirAsia Indonesia's director of safety and security, said the company is conferring with families separately because "we respect that (some) families are still hoping to see that their relatives survived, so we offered (compensation first) to those whose family members have been identified."

He said the company is preparing a total payout based on Indonesian regulations.

Indonesian agency that regulates its financial sector said Tuesday that the airline insurers were liable for a compensation amount of 1.25 billion rupiah (S$132,000) for each of the 155 passengers, and an additional 315 million rupiah to 750 million rupiah for 25 passengers who had purchased flight insurance.

The agency put to rest speculation that insurance companies would not be responsible for honoring claims after the Transportation Ministry revealed AirAsia had a permit to fly the Surabaya-Singapore on four days of the week, but not the day of the crash. The day of flight, it said, did not play a role in the crash and thus did not affect the insurance liability.

Insurance companies should begin processing claims without waiting for official pronouncements of death or cause of crash, it said.