The Mutiara Sentosa 2 ferry was travelling from Indonesia's second-largest city of Surabaya in East Java to the city of Makassar in South Sulawesi on Sunday with 232 passengers and 39 crew, when the fire broke out.
The ferry operator, PT Atosim Lampung Pelayaran, reported the incident to the Surabaya search and rescue office.
The company had received information from the ferry's captain that the vessel was on fire near the northern tip of Madura island, but contact was later lost.
Footage released by the National Search and Rescue Agency showed thick black smoke billowing from one side of the ferry and spreading across much of the ship.
Videos circulating on social media and messaging groups showed terrified passengers, mostly wearing life jackets, clustered on the deck and upper sections of the vessel awaiting rescue, some jumping into the sea as orange flames and black smoke billowed from the burning vessel.
The ferry was reported to be nearly engulfed by flames, with passengers gathered on the bridge and bow.
A tugboat and another passing vessel moved in and began evacuating passengers.
By Sunday afternoon, several nearby vessels managed to rescue 225 passengers and crew and recovered five bodies. At least 41 people remained unaccounted for.
The cause of the fire was not immediately known and remained under investigation.
Search and rescue teams dispatched a rescue vessel from Surabaya, although officials estimated it would take about six hours to reach the scene.
A rigid inflatable boat from the Sumenep rescue post was sent toward the location but later returned to shore because of rough seas and high waves. The Indonesian Navy also deployed a warship to assist.
The 160 metre long ferry serves the Surabaya-Makassar route, a voyage that typically takes around 40 hours and is primarily used by domestic travellers and cargo transport between Java and Sulawesi.
With AP
