(Bloomberg) -- An aging Indonesian military plane packed withfamilies crashed after takeoff in a densely-populated area ofSumatra’s biggest city, killing more than 140 people in the latestair disaster to beset the Southeast Asian nation.

The Lockheed C-130 Hercules was carrying 122 people including 12crew and nine children, and none survived, news website Liputan6.com cited Air Force FirstMarshal Dwi Badarmanto as saying. The plane also hit buildings,smashing into a hotel. Bisnis reported that 142 bodies wereretrieved from the site.

The Hercules, in operation since 1964, took off from the city ofMedan on a routine flight. The pilot asked to return to baseshortly afterward.

The crash raises fresh questions about the health and age ofIndonesia’s air force planes. President Joko Widodo has pledged toboost spending to replace outdated equipment as Indonesia faces thechallenge of preserving maritime security along the world’s largestarchipelago, a string of more than 17,000 islands that wouldstretch almost from New York to London.

“Excessive takeoff weight will probably be one scenario thatwill be examined,” said Ken Conboy, country manager at RMAIndonesia, a Jakarta-based risk management firm.

It is not uncommon for Indonesia’s air force to transport familymembers, especially to more remote areas where there are fewercommercial flights or where people would otherwise have to travelby boat.

The Hercules was headed to Tanjung Pinang in the Riau islandchain. It was carrying family members of the military heading tonew postings, and it’s possible distant family members were onboard, said military spokesman Fuad Basya.

“This is Indonesia, family is important,” he said by phone. “Noone paid to get on board.”

Two Minutes

The plane took off at 11.48 a.m. local time and fell out of thesky two minutes later, said Wisnu Darjono, a director at the stateair navigation agency. It dropped onto the same road where a PTMandala Airlines Boeing 737-200 crashed in 2005, killing 149people.

Military personnel at the crash site were seen with firearms,grenades and rockets, MetroTV reported. Military spokesman Basyasaid the plane may have carried ammunition, but not explosives.

“The plane was very much fit to fly,” he said. “Don’t look atthe age, look at flight time. We will be looking at everything,human error, mechanical issues and weather.”

Lockheed Martin Corp. is ready to support the air force as itinvestigates the crash, company spokeswoman Stephanie SonnenfeldStinn said in an e-mail.

Maritime Vision

The crash is the latest deadly accident in Indonesia’sdilapidated and poorly regulated transport network. An AirAsia Bhd.flight from Surabaya to Singapore fell into the Java Sea on Dec.28, killing all 162 on board and leading the government to fireofficials after finding airlines in breach of permits.

Widodo, known as Jokowi, has laid out an ambitious maritimevision that spans the development of the fishing industry, improvedport infrastructure, stronger sea defenses and better diplomacy asIndonesia deals with illegal fishing, territorial disputes andpiracy. Key to that is modernizing a military where spending hasfocused on the ground forces.

‘Essential Tool’

“The C-130 is an essential tool in moving personnel and theirfamilies around the country,” said Keith Loveard, head of riskanalysis at security company Concord Consulting. “The fact thisaircraft was made in 1964 says a lot about the long haul stillneeded to reach the military’s Minimum Essential Force goal.”

Indonesia’s defense budget will rise at the fastest pace in theAsia-Pacific region over the next five years, according to a Mayreport by IHS Inc. Spending will increase 17% this year to 97.4trillion rupiah ($7.3 billion), it said.

The country will double its military budget if annual economicgrowth meets the government’s target of 7% within three years,Bisnis Indonesia reported in May, citing Jokowi. The financeministry expects the economy may grow 5.2% this year, below abudget target for 5.7%.

U.S. Sanctions

U.S. sanctions on Indonesia’s military were lifted in 2005,allowing the resumption of arm sales. The U.S. in 2005 senttechnicians and parts to Indonesia to help repair the C-130fleet.

“There is no longer any embargo on the sale of spare parts, sothat is no longer a valid excuse,” Conboy said. “There have been acouple of recent air force mishaps, so I would imagine somequestions will be raised about the age of airframes and the levelof maintenance.”

--With assistance from Herdaru Purnomo and Neil Chatterjeein Jakarta and Julie Johnsson in Chicago.

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