An airline spokesperson and government officials said the Boeing 737 missed the runway and landed in shallow water on Saturday, .
"The aircraft was from Bandung, West Java, and about to land in Bali Ngurah Rai Airport but it probably failed to reach the runway and fell into the sea," said Lion Air spokesperson Edward Sirait.
He said there were 101 passengers and seven crew on board. Officials said all survived but there was no immediate word on injuries. An official had earlier said 172 passengers were on the plane.
Transport Ministry spokesperson Bambang Ervan told Reuters the plane landed in the sea before reaching the airport.
"There was no sign at all it would fall but then suddenly it dropped into the water," passenger Tantri Widiastuti (60) told Metro TV. "I saw holes in the floor of the plane … we were evacuated quickly."
She said she had been treated for minor cuts.
Lion Air is a leading budget air carrier in Indonesia. The company has signed two record contracts with two world's rivalling planemakers, Boeing and Airbus.
Indonesia has been struggling to improve its civil air safety after a string of deadly accidents. In 2007, Lion was among a number of Indonesian airlines banned by the European Union for lax safety standards. The ban was progressively lifted, starting in 2009.
Television footage showed the jet floating with a fractured fuselage and passengers in the water. – Reuters