Flight number QZ8501 lost contact with air traffic control at 07.24am local time, AirAsia said in a statement. A fierce storm was causing diversions at the time.
An official with the transport ministry, Hadi Mustofa, told local media the plane lost contact over the Java sea, which lies between Surabaya and Singapore.
QZ 8501 has 155 passengers and seven crew on board, including one Singaporean, one British, one Malaysian, three Koreans and 149 Indonesians, according to Indonesia's Transport Ministry.
A search and rescue operation is underway for the Airbus A320-200, AirAsia said in the statement.
''At the present time we unfortunately have no further information regarding the status of the passengers and crew members on board, but we will keep all parties informed as more information becomes available,'' the airline said.
Transport Ministry official Hadi Mustofa Djuraid told Metro TV that the plane lost contact somewhere between Kalimantan and Belitung island.
"The weather was not good - it was bad - at the estimated location the plane lost contact. We just received a weather report from the national meteorological, geophysics and climatology agency," said Hadi.
The following information has been released by Singapore's Civil Aviation Authority:
''INDONESIA AIRASIA INCIDENT
28 December 2014, 11:30am Local Time:- An Indonesia AirAsia aircraft, QZ8501, scheduled to arrive at 0830 hours local time from Surabaya, lost contact with Jakarta air traffic control at 0724 hours local time today. Singapore air traffic control was informed of this loss of contact at 0754 hours by Jakarta air traffic control. The aircraft was in the Indonesian Flight Information Region (FIR) when contact was lost, more than 200 nm southeast of the Singapore-Jakarta FIR boundary.
''Search and rescue operations have been activated by the Indonesian authorities from the Pangkal Pinang Search and Rescue office. The Singapore Rescue Coordination Centre (RCC), managed by the Civil Aviation Authority of Singapore (CAAS) and supported by various agencies, including the Republic of Singapore Air Force (RSAF) and the Republic of Singapore Navy (RSN), has also been activated and has offered help to the Indonesian authorities.
''Two C130s are already on stand-by for this purpose. We remain ready to provide any assistance to support the search and rescue effort.
''The CAAS and Changi Airport Group (CAG) Crisis Management Centres have already been activated. We are working with the airline's crisis management team.
''A waiting area, and all necessary facilities and support have been set up for relatives and friends of the affected passengers at Changi Airport Terminal 2 (Level 3).
''Further updates will be provided once more information is available.''
The disappearance comes at the end of a tragic year for Southeast Asian aviation. Two Malaysia Airline System aircraft were lost on different sides of the globe.
Malaysia Airlines flight MH370 vanished on March 8 with 239 passengers on a flight from Kuala Lumpur to Beijing. No trace has been found despite searches of the Indian Ocean off the coast of Western Australia, where it's believed the plane went down.
Malaysia Airlines flight MH17 from Amsterdam to Kuala Lumpur fell from the sky over Ukraine on July 17, probably the target of a rocket. Responsibility for the tragedy has yet to be apportioned.
The Straits Times reported that it's believed that Singapore's RSAF will be dispatching a C130 to look for the latest missing plane.
AirAsia abandoned its traditional red logo and covered its Facebook site in black and grey on news of the loss.
AirAsia has established an Emergency Call Centre for family or friends of those who may have been on board the flight. The number is +622 1298-50801
I pray everyone on board is still fine and that they make their destination in Singapore.
Posted by Duncan B on December 28, 2014 13:05