(Corrects headline to make clear families to get compensation)

JAKARTA, Jan 23 (Reuters) - An Indonesian airline will pay $55,000 as compensation for each passenger on its plane that vanished on New Year's Day with 102 people aboard, an airline official said on Tuesday.

The Adam Air Boeing 737-400 was on a flight from Surabaya in East Java to Manado in northern Sulawesi island when it disappeared from radar screens. There were 96 passengers and six crew on board.

"This will need time to process. But if all requirements are completed, we want to settle this immediately," said Ali Leonardi from Adam Air's legal department.

He added relatives would need to present documents, including the deceased's birth certificate, for the compensation to be paid. The budget carrier said families of the crew were not entitled to the same amount.

Only small pieces of the plane have been found floating in the sea or washed up on beaches off Sulawesi's western coast despite an intensive search since the disappearance.

Officials have suggested the plane might have crashed into the Makassar Strait, disintegrating into small pieces.

So far no bodies confirmed as the missing passengers have been found. Search head Eddy Suyanto has said that considering the parts of the plane found so far were mostly small, a body was unlikely to have survived any disaster in one piece.

Indonesian navy ships assisted by a U.S. oceanographic ship have been trying to locate the doomed jet's fuselage, which could still house the flight recorder that could provide clues to explain the disaster.

The flight recorder is set up to give off a signal for 30 days to aid detection, but it is likely to be very hard to locate in waters as deep as 1,700 metres (5,600 ft) in the area.

The plane made no distress call, although the pilot had reported concerns over crosswinds.

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