Indonesian budget airline Lion Air has been given two months to shape up by the Transportation Ministry or face possible sanctions.

The warning comes on the heels of a series of service and safety lapses.

Fuel leaked out from a Lion Air aircraft onto the tarmac at Juanda Airport in Surabaya, East Java, on Sunday.

On March 29, a flight from Jakarta was diverted from Singapore to Johor Baru, after the airline reportedly failed to secure landing rights.

The aircraft was to have been flown back from Singapore to Jakarta that same evening, leading to passengers on the second flight needing to be bussed to Senai Airport from Changi Airport.

Lion Air senior management were summoned by Transport Minister Budi Karya Sumadi on Monday to explain the airline's recent failings, which he said included the incident on March 29 as well as the oil spill in Surabaya.

"We are summoning Lion Air as the regulator and [industry] watchdog. We want to question them... and will find ways to solve the problems they are facing," he said. "I don't want these kinds of things to keep happening."

Agus Santoso, a Transport Ministry director in charge of overseeing Indonesia's airport, told reporters after the meeting that the ministry will closely monitor Lion Air's safety and service performance. "They will receive sanctions if they do not do well," he added.

Lion Air is committed to improving customer service and will conduct an internal investigation into incidents related to flight safety and security, said its managing director Daniel Putut.

The airline had previously confirmed the Surabaya fuel leak after photos posted on social media went viral. A spokesman said a few litres were spilled.

Lion Air did not respond to queries from The Straits Times yesterday about the March 29 flight that was diverted to Johor Baru.

According to some passengers The Straits Times spoke to, Lion Air had announced at the boarding gate in Jakarta that it had failed to secure landing rights to touch down at Changi and would be diverting the flight to Senai.

The announcement led to ugly scenes at the gate, with many taking to social media to air their anger at the budget airline.

Mr Paulus Sutrisno and his friends were among the passengers affected.

The group had secured tickets to see British band Coldplay at the Kallang Sports Hub on April 1.

Mr Paulus told The Straits Times that he understood that Lion Air was not able to secure a landing spot at Changi for the rescheduled arrival time after the flight was delayed.

Lion Air offered to place him on a direct flight to Singapore the next morning and provided him one night's hotel stay to make up for the flight diversion to Johor. Others either opted for a refund or went ahead with the flight to Johor Baru.

"We paid for a direct Jakarta-Singapore flight, not a transit in Johor Baru then a bus ride to Singapore," Mr Paulus said.

Lion Air began operations in 2000, expanding its routes and fleet of aircraft very quickly.

The airline is no stranger to service and safety lapses.

Last May, one of its pilots wrongly disembarked passengers on JT 161 from Singapore - an international flight - at the domestic terminal of Jakarta's Soekarno-Hatta airport.

Correction note: In our earlier story, we said Mr Paulus himself booked a direct flight to Singapore the next morning. This is incorrect. Lion Air offered to place him on a direct flight to Singapore the next morning. We are sorry for the error.