Separatists in Indonesia's breakaway eastern region of Papua have taken a New Zealand pilot hostage after attacking a small passenger plane and setting it on fire at an airport in a remote mountainous area, officials and a rebel group said.

Papuan insurgents who seek independence from Indonesia have previously threatened and attacked aircraft they believe to be carrying military or government personnel and supplies for Jakarta's forces.

The West Papua National Liberation Army (TPNPB), the military wing of Papua's main separatist group, claimed Tuesday's attack on a Susi Air plane in Nduga district -- an area where rebels have launched several attacks on authorities and civilians in recent years.

"The pilot has been taken to a TPNPB headquarters, it is very far away in another district," TPNPB spokesman Sebby Sambom told AFP Wednesday.

"It takes a long time to get there, maybe a day or two, They will probably arrive today."

He added that five passengers on board the plane were released after its arrival from the mining town of Timika because they were ethnic Papuans.

The rebels are demanding for Indonesia to recognise Papuan independence in return for the pilot's release and a meeting with Indonesian President Joko Widodo facilitated by the international community, Sambom said.

Since the attack, a joint team of Indonesian military and police was dispatched to search for the pilot, national police chief Listyo Sigit told reporters Tuesday.

New Zealand Prime Minister Chris Hipkins told Radio New Zealand Wednesday he only had preliminary information about the hostage situation but said their embassy in Jakarta was "working on the case".

Wellington "was aware of the situation involving a New Zealand pilot in Papua" and was providing consular support, a Ministry of Foreign Affairs and Trade spokesperson said.

Rebel attacks in Papua have risen in recent years and flying is the only available option to reach remote mountainous areas there.

Papua's Melanesian population shares few cultural connections with the rest of Indonesia and the military has long been accused of gross human rights abuses there.

A former Dutch colony, Papua declared itself independent in 1961, but Indonesia took control two years later, promising an independence referendum that was widely considered a sham.