The Airbus A320, flown by two German pilots and carrying five New Zealanders, plunged into the sea off the southern French coast as it approached Perpignan airport.
Two bodies were found shortly after the crash, but the five others were still missing.
The plane was on a test flight as part of maintenance being done before being returned to Air NZ after a two-year lease to German company XL Airways.
Air NZ said this morning that it had notified that bad weather meant the flight recorders were unlikely to be recovered until tomorrow.
Group general manager international Ed Sims said the conditions had significantly hampered search and rescue efforts.
"There are now high winds and significant swells, and temperatures remain cool in the search area," he said.
"Realistically, hopes of finding any survivors are fading. Our thoughts continue to be with the families of the missing men."
Four of the five New Zealanders on board were Air NZ staff.
They were Captain Brian Horrell, 52, from Auckland; and engineers Murray White, 37, from Auckland, Michael Gyles, 49, from Christchurch, and Noel Marsh, 35, from Christchurch.
The fifth New Zealander was Civil Aviation Authority airworthiness inspector Jeremy Cook, 58, of Wellington.
Mr Marsh leaves a pregnant wife and two young sons.
His wife, Tracy, and family said they were deeply saddened, but retained hope that Mr Marsh was still alive.
The flight involved a series of routine manoeuvres.
Capt Horrell, with 22 years' services with the Air NZ and one of the company's most experienced A320 captains, was sitting behind the two German pilots, observing that the plane was operating normally.
Mr White, Mr Gyles, Mr Marsh and Mr Cook were seated further back.
During its time with the German airline, the plane made 2800 flights totalling about 7000 hours of use.
It passed all its ground and maintenance inspections before taking off.
The plane disappeared off radar screens at 4.54 pm local time (4.54am NZ time) when it was about 8km out from Perpignan airport.
A gendarme who raised the alarm after he saw the plane go down said he watched as it suddenly went into a dive while flying at a height of around 300 metres.
"It tried to straighten up but then it fell right into the sea, sending a huge spray of water into the air," he said.
Strong winds and choppy seas made the search more difficult, but navy divers returned to the scene at dawn on Friday.
The wreck is lying on a sandy bank at a depth of 35m, according to officials who said late yesterday, before suspending the search for the night, that there was no hope of finding survivors.
A rescue plane and a helicopter were circling the crash area today to try to spot bodies, while several navy and coastguard boats scoured the sea.
French Transport Minister Dominique Bussereau flew over the site where the plane went down about 7km off the coast.
He later went to pay his respects to the two dead men in the hospital in Perpignan where their bodies were taken, and was due to be briefed by investigators probing the cause of the crash.
Mr Bussereau said the plane went to France for tests and to be repainted in Air NZ's colours before heading to Frankfurt, from where it had been scheduled to leave for New Zealand today.
An emergency services spokesman said the jet had been undergoing servicing at EAS Industries in Perpignan and had been flying circuits for 90 minutes before it crashed.
Hundreds of shocked Air NZ staff gathered at the airline's headquarters in Auckland where they were told it was unlikely any of those on board had survived.
Air NZ chief executive Rob Fyfe was en route to France today, along with family members of at least one of the airline's staff on the crashed plane.
New Zealand Prime Minister John Key said described the incident as a great tragedy.
"We'll work with Air New Zealand and the families to help in any way that is appropriate."
