Satellite imagery shows the plume has reached a height of about 18 kilometres, indicating a significant eruption.

Commercial flights typically cruise at altitudes of between nine and 12 kilometres and the Bureau of Meteorology has issued an advisory to airlines indicating where the cloud is likely to spread.

"The initial low-level ash is moving northwards, but as it gets a bit higher it's likely to spread out both to the north and south along the western side of the volcano," said Craig Earl-Spurr, meteorologist at the bureau's Darwin Volcanic Ash Advisory Centre. The bureau will continue to monitor the plume as it dissipates.

Qantas will reroute some flights around the ash cloud.

"As a result of the volcanic ash cloud, QF21, QF22 and QF130 will reroute their flight path to fly around it," a spokeswoman said.

Flights QF21 and QF22 operate between Sydney and Tokyo, while QF130 is a flight from Shanghai to Sydney.

Virgin Australia had no flights scheduled to operate near the ash cloud, but the company will closely monitor the situation as it develops, a spokesman said.

The eruption took place between 3.30am and 4am local time.

PNG media reported that some Rabaul residents were considering evacuating the island, fearing this to be the worst eruption since 1994, when explosions at the Vulcan and Tavurvur volcanoes forced locals to abandon the city temporarily.

Alice Edwards left Rabaul at 9am Friday and spoke to Fairfax Media from the airport, where she was trying to reach Kavieng in New Ireland province. She said many people had left Rabaul to escape dust and rocks being blown through the city by the volcano.

"This is my first time I've experienced the eruption," she said. "It's frightening."

The Rabaul caldera at the north-east end of New Britain, PNG, has a history of regular low-level eruptions. The Tavurvur volcano experienced eruptive activity in early March that generated ash plumes up to one kilometre high.

Volcanic ash can cause trouble for aircraft. In 1982, all four engines on a British Airways 747 flamed out when it flew through ash from an Indonesian volcano on its way to Perth. Pilots descended to 12,000 feet and were able to restart the engines.

Geoscience Australia said it did not record any seismic activity in the area of Rabaul or PNG.