Central Otago helicopter pilot James Ford was busy spraying on Cecil Peak Station near Queenstown when he heard a distress call over his radio about a tandem skydive crash.

It set off a chain of events involving two of his colleagues on land that resulted in the miraculous water rescue of a dazed skydive instructor who had just plunged into the icy waters of Lake Wakatipu.

"It's just a case of everything falling into place - bloomin' lucky to be honest, bloomin' lucky," station manager Philip Rive told the Herald tonight.

Planes, boats and jet skis search for a missing skydiver in Queenstown's Lake Wakatipu. Photo / Mandy Cooper
Planes, boats and jet skis search for a missing skydiver in Queenstown's Lake Wakatipu. Photo / Mandy Cooper

"It was a team effort."

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The instructor's passenger, a tourist in his 20s who was travelling in New Zealand alone, is missing presumed drowned. It emerged today that he and the instructor were the last of nine pairs to jump from the ill-fated NZONE skydive plane about on Tuesday afternoon.

Rive said he was working on his Central Otago station bordering Lake Wakatipu that day when he received Ford's call around 1.40pm.

Ford was flying his helicopter on the eastern side of the farm when he learned of the accident and quickly called Rive who decided to lend a hand.

Rive predicted he was 30 minutes' running distance from his boat on the lake's shore so Ford flew him down to his boat where Rive's wife Kate was getting the vessel ready.

Rive said he and his wife quickly sped to the location where a skydiving plane was circling near Jack's Point and found the tandem master in the water.

"Kate manoeuvred the boat right beside him and we pulled him on board," Rive told the Herald.

Laying the man down on the engine cover, they continued to search the area for the missing man with the assistance of the helicopter pilot above.

"I don't know how long we were looking, but the Queenstown Water Taxi has come over and we immediately off-loaded the fella we had on board," Rive said.

"Time was and is of the essence I suppose."

He said the tandem master was quiet and distressed after being pulled out of the cold waters of Lake Wakatipu.

Rive added that the whole rescue operation would not have been possible without Ford notifying him of the accident and his wife lending a hand.

While he was pleased their efforts had helped save the instructor's life, Rive could not help but feel sympathy for the family of the passenger who a fleet of rescue boats and aircraft were unable to find.

He was unsure how long they spent looking for the missing skydiver, but thought if he was in the area they would have found him.

After an extensive search, it is presumed the overseas traveller is now dead.

Addressing media today, NZONE director Anthony Ritter said the company had suspended operations and would undertake its own internal review of the incident. All the staff had been offered counselling.

A GoPro camera that had been strapped to the tandem master's wrist was salvaged and given to police. Ritter had not seen the footage but it would be used as part of the investigation.

He said all tandem skydivers wore a life jacket that needed to be inflated for use but it was not yet known if the passenger was able to inflate his before landing in the lake near Jack's Point.

Ritter said he met with the instructor, who has done more than 3000 tandem jumps, earlier today before the man went to a yoga session.

"The tandem master was released from hospital last night. Given the nature of the incident, he's in remarkably good spirits. He's doing very well and only has a few minor bruises."

Ritter praised those responsible for helping to save the instructor's life.

"A special note of thanks to the person who rescued our tandem master from the water. As I understand it he was flying overhead in his helicopter.

"He saw what happened. He managed to land near his home, jump in a boat and race out and save our tandem master's life."

The fatality was the first death in 27 years of operation, Ritter said.

However, 12 months ago another incident near Queenstown ended in a crash-landing with an instructor and trainee instructor both suffering serious injuries.

And the ABC in Australia reported that NZONE's parent company Experience Co, which runs Skydive Mission Beach in Far North Queensland, was involved in a fatal crash last year.

In that incident three months ago two instructors, Peter Dawson and Toby Turner, and a client, mother-of-eight Kerri Pike, died in what is believed to have been a mid-air collision.

Ritter said NZONE staff were working with police and consular officials to try to contact the man's next of kin.

He extended the company's deepest sympathies to the man's family and friends.

Suggestions that a parachute malfunction was the potential cause of the crash-landing into the lake was pure speculation, he said, adding that it was too soon to determine the cause of the fatal accident.

Police divers are now considering using sonar equipment to find the missing man, who disappeared in water about 250m deep.