A preliminary report has found technical problems had been reported on previous flights.
The 737 Max is a new version of Boeing's original 737 and has become its fastest selling plane.
The preliminary report details what is known by authorities about the short time the plane was in the air, but investigators said it did not give a definitive cause for the accident.
What's in the report?
The findings by the National Transport Safety Committee (KNKT) suggest that Lion Air put the plane back into service despite it having had problems on earlier flights.
The pilots appeared to struggle with an automated system designed to keep the plane from stalling - a new feature in the 737 Max family.
Anti-stall systems prevent a plane from pointing upwards at too high an angle, where it could lose its lift.
However, during the 29 October flight, the plane's automatic anti-stalling system repeatedly forced the plane's nose down, even when the plane was not stalling - possibly due to a faulty sensor, the report said.
Pilots tried to correct this by pointing the nose higher, until the system pushed it down again. This happened more than 20 times.
It is unclear why the pilots did not employ procedures to disable the automated system.
Nurcahyo Utomo, aviation head at the National Transport Safety Committee, said it was "too early to conclude" whether the anti-stall system had contributed to the crash.
He added that the plane experienced similar problems during its previous flight from Denpasar in Bali to Jakarta.
"In our opinion, the plane was no longer airworthy and it should not have continued," he said. The committee's report itself, though, does not spell out that conclusion.
The report said that Lion Air's safety culture should be improved and the airline should ensure the operations manual is followed "in order to improve the safety culture".
It also says the carrier must ensure "all operations documents are properly filled and documented".
What does Boeing say?
In a statement, plane manufacturer Boeing said that it was "deeply saddened" by the loss of the Lion Air flight.
"As our customers and their passengers continue to fly the 737 Max to hundreds of destinations around the world every day, they have our assurance that the 737 Max is as safe as any airplane that has ever flown in the skies."
Boeing said that "the appropriate procedure to address unintended horizontal stabiliser movement" was contained in the relevant flight manuals.
It said that the preliminary report showed that the correct procedures to counter the plane's nose being pushed down were carried out during the Denpasar flight the day before the crash.
However, it was not clear if they procedures were followed during the 29 October flight that crashed, Boeing added.
In an interview with the BBC, KNKT aviation head Nurcahyo Utomo appeared to dispute Boeing's account about the flight manuals.
"We haven't found the information in the manual relevant to the new feature to the 737- MAX, related to the feature for the stall prevention system," he said.
Some pilots have also complained that they were not given all the relevant information about the differences between the latest anti-stall system, and older models, US media report.
How did the 29 October crash unfold?
The plane was making a one-hour journey to the western city of Pangkal Pinang when it went down.
The jet crashed following a request from the pilot for permission to turn back to the airport minutes after taking off from Jakarta.
Investigators had previously revealed that the plane, on previous flights, had experienced technical problems related to airspeed and altitude readings.
Therefore the "angle-of-attack" sensor, which contributes to those readings, had been changed the day before the crash.
Rini Soegiyono's sister and brother-in-law were on the flight. After hearing the preliminary findings, she said she had mixed emotions.
"Sad, grieving, mourning, angry and disappointed - these are all the words that describe how I am feeling. But I am trying to be objective and strong."
She, like many grieving families, is mostly frustrated that the search for the remaining passengers has officially ended.
"There are still 64 families who haven't had their loved ones' remains identified and we have had to really push to get Lion Air and the authorities to search again for them. It's not good enough."
They want the airline to fund a search to find the remaining passengers as well as the cockpit voice recorder that hasn't been retrieved. It will be key, she says, to understanding what went wrong.
"We are watching and waiting to understand who is responsible. I know the world is also watching. It's important to know so it will not happen again. We don't want any family to have to go through what we are going through."
Indonesia's air safety record
Budget airline Lion Air has in recent years risen to become a major player in South East Asia's low cost aviation sector.
The airline, which also operates Batik Air and Wings Air, has a dubious safety record, though, and has had more accidents than other airlines in the country.
Overall, Indonesia's aviation safety record has improved a lot since the days when even its national carrier Garuda was blacklisted from European and US airports over safety concerns.
Keep these in mind as you contemplate the direction of the American government over the past 50 years and especially since the Obama election.
The Goals of Communism
(as read into the congressional record January 10, 1963, from "The Naked Communist" by Cleon Skousen)
1. U.S. acceptance of coexistence as the only alternative to atomic war.
2. U.S. willingness to capitulate in preference to engaging in atomic war.
3. Develop the illusion that total disarmament of the United States would be a demonstration of moral strength.
4. Permit free trade between all nations regardless of Communist affiliation and regardless of whether or not items could be used for war.
5. Extension of long-term loans to Russia and Soviet satellites.
6. Provide American aid to all nations regardless of Communist domination.
7. Grant recognition of Red China. Admission of Red China to the U.N.
8. Set up East and West Germany as separate states in spite of Khrushchev's promise in 1955 to settle the German question by free elections under supervision of the U.N.
9. Prolong the conferences to ban atomic tests because the United States has agreed to suspend tests as long as negotiations are in progress.
10. Allow all Soviet satellites individual representation in the U.N.
11. Promote the U.N. as the only hope for mankind. If its charter is rewritten, demand that it be set up as a one-world government with its own independent armed forces. (Some Communist leaders believe the world can be taken over as easily by the U.N. as by Moscow. Sometimes these two centers compete with each other as they are now doing in the Congo.)
12. Resist any attempt to outlaw the Communist Party.
13. Do away with all loyalty oaths.
14. Continue giving Russia access to the U.S. Patent Office.
15. Capture one or both of the political parties in the United States.
16. Use technical decisions of the courts to weaken basic American institutions by claiming their activities violate civil rights.
17. Get control of the schools. Use them as transmission belts for socialism and current Communist propaganda. Soften the curriculum. Get control of teachers' associations. Put the party line in textbooks.
18. Gain control of all student newspapers.
19. Use student riots to foment public protests against programs or organizations which are under Communist attack.
20. Infiltrate the press. Get control of book-review assignments, editorial writing, policymaking positions.
21. Gain control of key positions in radio, TV, and motion pictures.
22. Continue discrediting American culture by degrading all forms of artistic expression. An American Communist cell was told to "eliminate all good sculpture from parks and buildings, substitute shapeless, awkward and meaningless forms."
23. Control art critics and directors of art museums. "Our plan is to promote ugliness, repulsive, meaningless art."
24. Eliminate all laws governing obscenity by calling them "censorship" and a violation of free speech and free press.
25. Break down cultural standards of morality by promoting pornography and obscenity in books, magazines, motion pictures, radio, and TV.
26. Present homosexuality, degeneracy and promiscuity as "normal, natural, healthy."
27. Infiltrate the churches and replace revealed religion with "social" religion. Discredit the Bible and emphasize the need for intellectual maturity which does not need a "religious crutch."
28. Eliminate prayer or any phase of religious expression in the schools on the ground that it violates the principle of "separation of church and state."
29. Discredit the American Constitution by calling it inadequate, old-fashioned, out of step with modern needs, a hindrance to cooperation between nations on a worldwide basis.
30. Discredit the American Founding Fathers. Present them as selfish aristocrats who had no concern for the "common man."
31. Belittle all forms of American culture and discourage the teaching of American history on the ground that it was only a minor part of the "big picture." Give more emphasis to Russian history since the Communists took over.
32. Support any socialist movement to give centralized control over any part of the culture--education, social agencies, welfare programs, mental health clinics, etc.
33. Eliminate all laws or procedures which interfere with the operation of the Communist apparatus.
34. Eliminate the House Committee on Un-American Activities.
35. Discredit and eventually dismantle the FBI.
36. Infiltrate and gain control of more unions.
37. Infiltrate and gain control of big business.
38. Transfer some of the powers of arrest from the police to social agencies. Treat all behavioral problems as psychiatric disorders which no one but psychiatrists can understand.
39. Dominate the psychiatric profession and use mental health laws as a means of gaining coercive control over those who oppose Communist goals.
40. Discredit the family as an institution. Encourage promiscuity and easy divorce.
41. Emphasize the need to raise children away from the negative influence of parents. Attribute prejudices, mental blocks and retarding of children to suppressive influence of parents.
42. Create the impression that violence and insurrection are legitimate aspects of the American tradition; that students and special-interest groups should rise up and use united force to solve economic, political or social problems.
43. Overthrow all colonial governments before native populations are ready for self-government.
44. Internationalize the Panama Canal.
45. Repeal the Connally reservation so the United States cannot prevent the World Court from seizing jurisdiction over nations and individuals alike.
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