A plane carrying dozens of passengers has crashed in Papua New Guinea, and most of those on board are feared dead.

The Airlines PNG Dash-8 was flying from Lae to Madang on the country's north coast when it crashed around 6:00pm (AEDT).

Witnesses in Madang say there was a violent thunderstorm in the area at the time of the crash.

The Accident Investigation Commission (AIC) says there were 32 people on board.

Residents near the crash site say there are four survivors, but the figure has not been officially confirmed.

Most of the passengers are believed to be the families of local students flying in for their graduation ceremony this weekend.

Sid O'Toole from the AIC says the plane went down over land about 20 kilometres south of Madang.

"There were reports of fire and there have been some fatalities," he said.

Mr O'Toole says there are also survivors but did not provide any details.

He says police and ambulances have reached the crash site and investigators will be travelling there on Friday.

Consular staff at the Australian High Commission are trying to determine if there were any Australians on board.

Australian transport accident officials have also been contacted for assistance.

More than 20 planes have crashed since 2000 in Papua New Guinea, whose rugged terrain and lack of internal connecting roads make air travel crucial for its six million citizens.

A 20-seat Twin Otter crashed in August 2009, killing nine Australians and one Japanese tourist on the short journey from Port Moresby to the popular Kokoda trekking site.

That accident - in which an aircraft ploughed into a mountainside - also involved an Airlines PNG plane, with a subsequent report ruling pilot error was likely at fault in conditions of poor visibility.

PNG has since introduced legislation requiring all aircraft carrying more than nine people to have a cockpit recorder installed.