Rescue teams were Wednesday scouring a remote mountainous area of Nepal where a passenger plane went missing with 21 people on board, two of them children.

Tara Air said the Twin Otter aircraft had lost contact with air traffic control eight minutes after taking off from the popular tourist town of Pokhara in western Nepal early on Wednesday.

The airline said the plane was carrying three crew and 18 passengers, one a Chinese and one a Kuwaiti national. All the others were from Nepal and two were children.

"We have dispatched three helicopters on a search and rescue mission. We will provide updates as they come," said a statement posted on its website.

It said weather conditions were good when the plane took off for Jomsom, a popular trekking destination in the Himalayas about 20 minutes' flight from Pokhara, which lies 225 kilometres (360 miles) west of Kathmandu.

"The weather at both origin and destination airports was favourable and the airport cleared for departure by the control tower at Pokhara," said the statement.

A Nepal Army spokesman, however, said fog was hampering the search for the Twin Otter plane.

"Our rescue teams have been deployed, but the weather was not clear in the morning," said army spokesman Tara Bahadur Karki.

"They are still out looking at possible areas, but the plane has not been located yet."

Air travel is popular in Nepal, which has only a limited road network. Many communities, particularly in the mountains and hills, are accessible only on foot or by air.

The country, which is still reeling from a devastating earthquake last April, has suffered a number of air disasters in recent years, dealing a blow to its tourist industry.

Most have been attributed to inexperienced pilots, poor management and inadequate maintenance.

Two years ago, a Twin Otter plane belonging to the national carrier carrier Nepal Airlines crashed into a hillside shortly after taking off from Pokhara, killing all 18 people on board.

Tara Air is a subsidiary of Yeti Airlines, a privately owned domestic carrier founded in 1998 which runs a service to many remote destinations across Nepal.

It suffered its last fatal accident in 2010 when a plane chartered by a group of Bhutanese tourists crashed into a mountainside in eastern Nepal.

The country's aviation sector has come under fire from international authorities and in 2013 the European Union blacklisted all Nepal's airlines.

EU Transport Commissioner Siim Kallas said at the time that the country's safety record "does not leave us any other choice".

Nepal's last major aviation accident occurred last May when a US military helicopter assisting with earthquake relief crashed in bad weather, killing six Marines and seven other people.