Some airlines, including Adam Air, must improve standards or face closure, while one small carrier, Dirgantara Air Service, has already been grounded, Budhi Muliawan Suyitno revealed.
"Since the deregulation of airlines there are many violations. Such violations could cause latent failure, such as a serious accident," Suyitno told reporters.
The announcement follows a March 7 crash landing by a Garuda Indonesia jet in the central city of Yogyakarta, which killed 21 people, and after an Adam Air jet plunged into the sea off Sulawesi on New Year's Day, killing 102.
Indonesia's airline industry was deregulated in the 1990s, encouraging many new operators to take to the skies and producing massive passenger growth.
But the recent disasters and other accidents have raised fears of lax safety.
The drive classifies the 54 airlines into three safety categories.
None qualified for the top one, the category which indicates high safety, Suyitno said in a statement.
National carrier Garuda Indonesia was put into the second category. This means the airline meets minimum safety requirements but needed to make some improvements.
Fifteen companies, including six scheduled passenger airlines, were placed in the lowest category and were considered to have met only minimal standards of safety.
Adam Air was put in the last category, where airlines also meet minimum safety conditions but must undertake more serious improvements or face closure after a series of warnings over a number of months.
Suyitno said the new airline category system, which is based on 20 safety criteria like accident history and maintenance standards, was born of the need for a systematic and durable approach to passenger protection.
Suyitno replaced the previous air transport head earlier this month amid mounting pressure on Transport Minister Hatta Rajasa for improvements after the Garuda disaster.
Rajasa's job was also thought at risk as television images of the Boeing jet erupting in flames, taken by a cameraman who survived, flashed around the world.
Earlier this month Oetarjo Diran, a member of a task force appointed by Indonesia's President Susilo Bambang Yudhoyono in January to evaluate transport safety, said air safety in Indonesia was "at a low point".
Experts have blamed old planes, lax standards and insufficient investment in infrastructure for the crashes and other incidents.
Indonesia has also suffered deadly ferry accidents in recent months.
The disasters have shaken confidence in the air and sea links that bind this sprawling archipelago nation of 17,000 islands.Agencies