Lion Air’s director of operations Daniel Putu, left, and Ministry of Transportation’s director general for aviation Suprasetyo addresses the media at the Ministry on Feb. 23, 2015. (Antara Photo/Andika Wahyu)

Jakarta. The Ministry of Transportation has formed an audit team to investigate last week’s massive delays that affected thousands of Lion Air passengers.

The delays, which went largely unexplained by the budget carrier to its infuriated passengers, first began Wednesday night when three of its airplanes were damaged, virtually simultaneously, at airports due to “foreign objects,” according to a Lion Air statement.

The grounding of the three planes led to a domino effect on other routes lasting until Sunday, the airline has said.

The Ministry on Monday announced that a total of 567 Lion Air flights were delayed last week.

The ministry’s director general for aviation Suprasetyo said the audit team will investigate for the next seven days, beginning today.

Suprasetyo said Lion Air will be audited based on suspicion that it had violated two articles on the 2009 Law on Aviation.

“The problem lies with [Lion Air’s] handling of the delay,” he said.

Passengers, some claiming to have waited more than 24 hours before flying, had told reporters that during their grueling wait, the carrier did not provide any explanation for the delay, nor provide snacks, meals or accommodation — as mandated by the law.

On Friday, a group of passengers forced their way onto the airport’s Terminal 3 apron, besieging a parked Lion Air plane while others stormed ticket counters.

Suprasetyo said a preliminary investigation found the carrier had failed to meet regulations on the handling of delays.

“There are rules on what [carriers] must do in the event of a delay or cancellation. If a flight is canceled [carriers] must transfer [their passengers] on board another flight from another carrier.”

“If no [flights] were available, airlines must provide meals and accommodations,” he said.

Lion Air president director Edward Sirait said the carrier welcomes the audit.

“We have no problem with it. We are open for it,” he told a press conference.

Edward also denied the company was facing any financial difficulty after airport operator Angkasa Pura II agreed to temporarily handle ticket refunds.

Angkasa Pura initially set aside Rp 4 billion ($300,000) but only 548 passengers filed for a refund, while most opted for a reschedule.

On Sunday, Lion Air reimbursed the Rp 526 million Angkasa Pura spent compensating passengers.

Edward said Lion Air did not have enough cash on hand at the airport to issue ticket refunds, citing the long weekend of the Lunar New Year holiday. Banks were closed on the Thursday.

Lion Air’s limited cash was also due to tickets being paid by electronic transaction payments, he added.

“Travel agent sales use a top-up system, not cash. Most passengers also pay for the tickets using [bank transfer at] the automated teller machine. That’s why we don’t have much cash. We usually refund by transferring the money,” Edward said.

The short cash, he claimed, was a mere technical glitch and does not represent the carrier’s financial condition.

The carrier aims to become the largest carrier in the world by fleet size after signing the two largest contracts in commercial aviation history in 2013.

Lion Air has placed an order of 230 aircraft with Boeing and 234 planes with Airbus.

“We are financially stable” Edward said. “We are bankable in the eyes of our lessors. If we weren’t bankable then of course banks or lessors will not trust us with their assets.”

Edward said that the carrier is aiming to be 87.5 percent on time saying that its on time performance is currently “under 80 percent.”

“If you ask us to be 100 percent [on time], of course, we can’t! But we are aiming for 87.5 percent, taking into account that there will be delays about 15 percent of the time, which is not our fault!” he said.

Edward also said that all of its ground staff will be trained to handle similar incidents in the future.

“We will also form a special team to handle emergency situations at airports,” he said.

The carrier is also calculating how many of the soon to be delivered planes will be earmarked to support operations in Indonesia — where it currently operates 107 planes.

The majority of the new planes will be allocated to Thai Lion and Malindo Air, which operates in Thailand and Malaysia respectively, Edward said.

The Transportation Ministry has issued a moratorium on new routes for the low-cost carrier following the severe delays.

Ministry official Hadi M. Djuraid said on Monday that the moratorium will be lifted “once Lion Air proves to the Transportation Ministry that it has revised and implement its standard operating procedures for its services.”

The lifting “can be a week or two weeks from now. We are waiting [for Lion Air] to keep its word,” he said.

Lion Air operational director Daniel Putut attended the ministry’s office in Central Jakarta on Monday to explain what actions had been taken during last week’s delay.

“There were technical problems in three of our planes so we couldn’t fly them. Plus there are four planes already scheduled for maintenance,” he told reporters at the ministry’s office.

“We are ready to make some improvements in our crisis management system as well as our delay and cancelation handling procedures. We have received a very harsh warning letter from the ministry and we are ready to face whatever sanction given.”

Daniel said that Lion Air’s operation back to normal as of Monday.

“There are delays of no more than 30 minutes which we still consider normal,” he said.

Lawmaker Muhidin M. Said of the Golkar Party said the sanctions given by the ministry was not enough and the debacle showed that Lion Air was never serious about handling delay.

“Internally, [Lion Air’s] management never trained their staff how to handle passengers in the event of a prolonged delay,” the politician said adding that the staff’s incompetence and lack of handling mechanism resulted in some violence to flare up last week.

Regional Representatives Council (DPD) member Parlindungan Purba called on his colleagues to summon Transportation Minister Ignasius Jonan and demand an explanation for what Parlindungan called Jonan’s inaction and lenient stance on the matter.

“Lion Air has gone down in aviation history as the worst service provider of all time,” Parlindungan said.

“If they can’t fix their management and services then it is best they are not allowed to fly at all.”

Similar sentiment was aired by Tulus Abadi of the Indonesian Consumer Protections Foundation.

“The government as regulator should have given harsh sanctions to Lion Air, which has blatantly violated consumers’ rights,” he said.

Passengers demanded the compensation scheme mandated by the government should be based not only on ticket prices, but other losses incurred by flight delays and cancellations.

“I have booked a connecting flight which I missed thanks to the delay. They should compensate that as well,” said one passenger, Herman Sitanggang.

Angkasa Pura II president director Budi Karya Sumadi said the ministry must also issue a regulation mandating all carriers to make a deposit to airport operators to avoid future ticket refund chaos.

“We will discuss this proposal to the Ministry of Transportation,” he said as quoted by CNN Indonesia.

Vice President Jusuf Kalla agreed with Angkasa Pura II’s proposed scheme, saying that it will expedite the ticket refund mechanism to passengers’ benefit.

“Just imagine a passenger having to travel to and from the airport back and forth just to claim a refund, which could take days to be disbursed. Why not have [carriers] pay a deposit to Angkasa Pura II?” he said.