JAKARTA - Indonesia requires AirAsia Indonesia to pay compensation to the next of kin of victims of flight QZ8501, officials said on Monday.

"An airline must pay compensation," Acting Air Transportation Director-General Djoko Murdjatmodjo said. "The obligation to pay compensation lies with the airline," he said in response to a question on insurance payment by AirAsia.

Payment dispute has arisen after AirAsia was reported to have illegally flying the Surabaya-Singapore route on Sundays when it was not granted permission from Indonesia to do so.

Tribunnews had reported that AirAsia must pay 1.25 billion rupiah in insurance and other forms of payment for every passenger on the flight which went missing with 155 passengers on board on Dec 28.

Search personnel have retrieved 37 bodies and debris so far from the Indonesian seas.