Tongan police said 55 passengers and crew had been rescued and air force planes from New Zealand had joined the search for the missing.
Keith Allen, who also works at the RCCNZ, told Al Jazeera that the route was a regular service operating from the Tongan capital.
"It was a regular trip as ferries are heavily relied on due to the numerous islands in this region, but it is still not known what caused the ferry to capsize," he said.
Police said the exact number of people on board was still unknown with the company operating the vessel saying there were an estimated 96 people on board but its official manifest registering 79 passengers and crew.
"Realistically we believe there were more passengers on board but we could not confirm at this stage how many they are," chief inspector Sokopeti To'ia told the AFP news agency.
The only body recovered nearly a full day after the accident was that of a British man carrying a New Zealand driver's licence, officials said.