Waiheke Island resident Hans Versluys, a 52-year-old television programmer, said: "If this had happened with a stronger nor'easter, it had the potential of being a major disaster - the Motuihe reef was quite close by."
Jet Raider was notorious with regular ferry passengers who called it the "Tomb Raider" and the "Vomit Comet", he said. "They haven't bought a new ferry for ages now."
Waiheke resident Kevin White said StarFlyte pulled up next to Jet Raider shortly after he heard an explosion.
"They tied the two boats together and we hopped across. We were up on the top deck and it was pretty exposed. I don't know what they'd have done if it was rough weather."
Former Waiheke councillor Denise Roche said she believed the fleet was run down. "The problem with having a monopoly provider with the ferry is that the fleet gets run down. Waiheke people are paying through the nose for it. I'm not surprised that we've had this terrible incident on the high seas."
Fullers chief executive Douglas Hudson said there was no fire but smoke had triggered the fire alarm. Hudson said Jet Raider was one of two boats which had been used to replace the more comfortable catamaran normally used for the Auckland-to-Waiheke trip, which had been chartered.
The charter was to transport a large number of guests, including conservation minister Kate Wilkinson, for the release of takahe by the Department of Conservation on Rangitoto and Motutapu islands.
Northern Fire Communications Centre shift manager Scott Osmond said fire officers collected specialist gear from the Ponsonby station and rode a police launch to the scene.
Fires on boats were a serious matter, he said. "It's either get burned or jump into the tide in some cases."
Fullers had to send a 17m tug to tow the ferry back to Queen's Wharf.