Strong winds have drifted the ashes from the volcano more than half way around the world, across the Pacific into Australian and New Zealand airspace.
Chile’s Puyehue volcano erupted more than a week ago.
National airlines Qantas cancelled all services to and from Tasmania and New Zealand for the rest of the day on Tuesday morning while its Adelaide services remain grounded because of the ash cloud, according to media reports here.
Dozens of flights are delayed or cancelled because of the ash cloud, which is streaming over Adelaide and Tasmania. However international carriers are still operating.
Virgin Australia on Monday resumed normal services in and out of Melbourne, Tasmania and New Zealand and said it planned to operate normal scheduled services again.
About 20,000 Qantas passengers have had their flights disrupted, with 15,000 yet to reach their destination. More than 50,000 people in total were caught up in the travel chaos.
Meanwhile, Civil Aviation Safety Authority said it had no issue with airlines continuing operations provided they avoid the areas of forecast volcanic ash and any actual areas of ash.
Tiger Airways said its flights between Melbourne and Adelaide had been cancelled as had flights from Perth.
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