Gympie pilot Mike Oulton, 59, was about to join a Christmas party for Skydive Hervey Bay at the Flame Lily Adventures tourist park in Burrum Heads.

Flame Lily owner Jimmy Swan said a group of seven children, aged between two and five, were standing underneath the powerlines and waving to the pilot as the Cessna came in to land shortly after 10am.

"He was coming over the top of the property to give us a wave," Mr Swan told the Fraser Coast Chronicle.

"He caught the top of the powerlines with his wheel.

"We got [the children] down to the ground when the wires were flying around."

Mr Swan said two explosions rang out before the plane crashed into a paddock opposite the tourist park.

When Mr Swan reached the wreckage it was engulfed in flames.

"The metal was already twisted. There was just nothing left," he said.

It took hours for police to determine only one person had been on board.

"This at any time of the year is terrible, let alone a week before Christmas," said Acting Inspector Troy Pukallus.

The Australian Transport and Safety Bureau will spend the next three days examining the crash site and interviewing witnesses.

The tourist park was hosting the Christmas party for Skydive Hervey Bay in which Santa had been scheduled to skydive from a plane to deliver presents to the children.

A second light plane with Santa on board was already en route to the tourist park when Mr Oulton's Cessna crashed.

It's understood Mr Outlon, an experienced pilot and skydiver, had taken off from his private airstrip.

An adventure park staff member, who did not want to be identified, said the tragedy had ended what began as a good day.

"All I can say about the pilot is he was very experienced, he was a really nice chap and we're all going to miss him terribly," she said.

An Ergon Energy spokesman said the plane knocked out four electricity transmission lines, cutting power to 1600 homes and businesses for two hours yesterday.