INVESTIGATORS are trying to work out how an Indonesian passenger plane overshot the runway at Bali airport before crashing into the sea.

All 101 passengers and seven crew on the Lion Air flight survived, although dozens were said to be injured and at least seven were taken to hospital with head wounds and broken bones.

The new Boeing 737-800 had been trying to land at Denpasar's Ngurah Rai International Airport about 3.30pm local time (1730 AEST) on Saturday when it crashed.

No Australians were on the plane, the Department of Foreign Affairs and Trade in Canberra said.

media_camera A Lion Air Boeing 737 lies submerged in the water after missing the runaway during landing at Bali's international airport near Denpasar on April 14, 2013. AFP PHOTO/SONNY TUMBELAKA

Photographs on Indonesian television showed the plane's fuselage had split in two just behind the wings, and the plane half submerged in shallow water.

media_camera In this photo released by Indonesia's National Rescue Team, rescuers stand near the wreckage of a crashed Lion Air plane in Bali, Indonesia.

The Boeing 737 was on a domestic flight from Bandung in West Java.

Transport ministry official Herry Bhakti initially said the plane overshot the runway, but later clarified his comments to say it landed straight in the water. Officials said they were still determining exactly why it ditched.

Lion Air's general affairs director, Edward Sirait, said the plane had 95 adults, five children and a baby, along with seven crew, on board.

"The plane broke into two pieces,'' he said.

media_camera A Lion Air Boeing 737 lies submerged in the water after missing the runaway during landing at Bali's international airport near Denpasar on April 14, 2013. AFP PHOTO/SONNY TUMBELAKA

media_camera This photo released by Indonesia's National Rescue Team shows rescuers at the crash site of a Lion Air plane in Bali, Indonesia.

An Australian surfer paddling nearby was reportedly among those who helped passengers, mostly believed to be locals, to the shore.

There were three foreigners on board - two Singaporeans and a French national - all of whom suffered slight injuries.

TV footage showed police and rescuers using rubber boats to evacuate the passengers and crew. The Boeing 737 could be seen sitting in the shallow water with a large crack in its fuselage.

"The plane plunged into the sea at high speed,'' said passenger Ignatius Juan Sinduk, 45, from his hospital bed in Denpasar where he was being treated for breathing difficulties.

"Everybody screamed and water suddenly surged into the plane. Passengers panicked and scrambled for life jackets. Some passengers fell, some ran into others, it was chaos.

"I managed to grab one (a lifejacket) and slowly swam out of the plane and to the shore.''

Passenger Santy Wiastuti, being treated at Kasih Ibu Hospital for injuries to her leg, said there was no warning of the impending crash.

"There was no signal, anything, it just happened suddenly," Ms Wiastuti said.

Andis, another passenger, said there was a loud bang as the plane hit the water, prompting panic.

"I looked down. It was suddenly sea," Andis said.

media_camera A passenger injured in a plane crash on a stretcher is carried for a medical treatment at a hospital in Jimbarn, Bali, Indonesia.

Another survivor, Rusmaya, 50, said the crew yelled at passengers to put on life vests.

"My hand was shaking so someone helped me take it. The water was already in the plane," she said.

A spokesman for Lion Air, a low-cost carrier, said at a news conference that the plane crashed about 50 meters ahead of the runway. The weather was cloudy with rain at the time of the incident.

"It apparently failed to reach the runway and fell into the sea,'' said the spokesman, Edward Sirait.

He said the Boeing 737-800 Next Generation plane was received by the airline last month and was declared airworthy. The plane originated in Bandung, the capital of West Java province, and had landed in two other cities on Saturday prior to the crash.

media_camera This handout photo released by the Indonesian Police on April 13, 2013 shows a Lion Air Boeing 737 submerged in the water after skidding off the runaway during landing at Bali's international airport near Denpasar.

"We are not in a capacity to announce the cause of the crash,'' Sirait said, adding that the National Safety Transportation Committee was investigating.

"The aircraft was in landing position when suddenly I saw it getting closer to the sea, and finally it hit the water,'' Dewi, a passenger who sustained head wounds in the crash and uses one name, said.

"All of the passengers were screaming in panic in fear they would drown. I left behind my belongings and went to an emergency door,'' she said. "I got out of the plane and swam before rescuers jumped in to help me.''

Rapidly expanding Lion Air is Indonesia's top discount carrier, holding about a 50 per cent market share in the country, a sprawling archipelago of 240 million people that's seeing a boom in both economic growth and air travel.

The airline has been involved in six accidents since 2002, four of them involving Boeing 737s and one resulting in 25 deaths, according to the Aviation Safety Network's website.

media_camera The wreckage a crashed Lion Air plane sits on the water near the airport in Bali, Indonesia.

Lion Air commercial director Edward Sirait said some passengers had been taken to a hospital in Denpasar.

"All passengers and crew are safe, 101 passengers and seven crew. They've been taken to the nearest hospital,'' he said.

Mr Sirait said that the plane was new, and began operating last year.

"The plane is Boeing 737-800 NG, Next Generation. It's a new one, a 2012 product,'' he said.

"It actually has sophisticated technology to anticipate accident. Let's see what the data says about that accident.''

Lion Air started operating in 2000 and services more than 36 destinations, mostly in Indonesia.

The airline last month agreed to buy 234 Airbus planes and announced that it planned to target new routes in Asia, as well as a venture in Australia.

Lion Air is currently banned from flying to Europe due to broader safety lapses in the Indonesian airline industry that have long plagued the country. Last year, a Sukhoi Superjet-100 slammed into a volcano during a demonstration flight, killing all 45 people on board.

Passengers said on Facebook they were stranded at the airport.

"A landing plane has overshot the runway and ended up in the water," one tourist, from Perth, said.

"As a result, the whole airport is closed and we're stranded."

Indonesia is one of Asia's most rapidly expanding airline markets, but is struggling to provide qualified pilots, mechanics, air traffic controllers and updated airport technology to ensure safety.

Originally published as Plane crashes off coast of Bali