Ash cloud costing airlines millions

Qantas and its subsidiary Jetstar have cancelled all flights in and out of New Zealand today due to the ash cloud still lingering from a Chilean volcano.

Jetstar also grounded its domestic flights in New Zealand and both airlines said the disruptions were costing them millions.

Today's announcement came as Jetstar chief executive Bruce Buchanan said the flight disruptions had cost his airline $10 million ($NZ13 million).

Parent company Qantas had lost $A11m in revenue and costs.

Air New Zealand continued to fly but at a much lower altitude to avoid the ash cloud but it said today it had not yet analysed the financial impact of its decision to stay in the air.

Air New Zealand had earlier said flying below the ash cloud had increased its fuel costs by 10 percent.

The Chilean volcano's ash cloud appears to be settled over the country today, and possibly tomorrow, continuing the two weeks of flight disruptions.

Qantas has also cancelled all domestic New Zealand flights today because of the ash cloud - and its subsidiary Jetstar has done the same.

Pacific Blue has also cancelled its flights between the two countries today and tomorrow.

Chilean airline LAN yesterday said it would suspend its daily flights between Auckland and Santiago due to what it described as "continuing uncertainty about volcanic ash cloud in New Zealand airspace".

However, Air New Zealand said it was business as usual as its aircraft fly around and under the ash cloud, albeit at the cost of using more fuel.

Civil Aviation Authority meteorologist Peter Lechner said it had appeared the cloud would clear from over Northland but the latest forecast predicted it would settle over the country for the rest of the day and probably part of tomorrow.

"It looks like it's more likely going to sit over us for a little while, which is a shame."

Chile's Mt Puyehue Cordon Caulle began erupting on June 4 and the volcanic ash, which has the potential to damage aircraft engines, began arriving in New Zealand a week later after traversing the Southern Hemisphere.

Mr Lechner said that this morning the volcano was still erupting, sending material 15,000 feet, or 4.5km, into the air.

"Fifteen-thousand feet might not be so bad, but occasionally it's quite high, 30,000ft, and those are the ones which get as far as us."

Air New Zealand is still operating its standard schedule to domestic and international airports, saying it is safe to fly below 24,000ft.