Ash continues to disrupt flights

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

Air New Zealand this afternoon said it was continuing to fly at a lower altitude to avoid the ash.

Jetstar and Qantas said the disruptions were costing them millions.

Jetstar chief executive Bruce Buchanan said the flight disruptions had cost his airline $A10 million ($NZ13 million). Parent company Qantas had lost $A11m in revenue and costs.

Australian domestic and international services were operating to schedule.

Air NZ said today it had not yet analysed the financial impact of its decision to stay in the air. Earlier it had said flying below the ash cloud had increased its fuel costs by 10 percent.

Civil Aviation Authority meteorologist Peter Lechner today 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."