He said it's worse than the Manawatu gorge slips.
Key and Brownlee estimate the clean-up will run into the hundreds of millions and clearing the debris and blocked roads could take months.
As the chopper surveys damage over the wider Kaikoura area, further earthquakes hit and dust from rockfalls and slips cand be seen.
Dust billowed down the hillside as the chopper circulates. An earthquake has hit.
"That's a goodie," said one of the pilots.
He has never been airborne when a quake has hit before.
"Not something you see every day. Better to be above it than below it," says Key.
The doors are opened and the helicopter flies low to them and Andrew Little a closer view.
The crew runs through what other defence force personnel have been doing through the day. Some have gathered supplies to take in to Kaikoura.
A number of NH90s are preparing to take in tonnes of food, water and other supplies tomorrow.
"It's really warm," Key observed as he flied over the Clarence river mouth.
"It's a lot of water running down there."
Parts of the area are clearly impassable and the water is a murky brown.
The doors to the chopper are open as we fly over the hills and the air is thick with dust.
"It's like a fire almost," Key said.
Andrew Little said the mudslides and rockfalls are "stunning".
"I can't imagine what it will be like to clear it," he told us.
The plane descended sharply in to Kaikoura in bumpy conditions.
"Look at that road down there, it's been hammered," Key says.
A hill looks like it has slumped. "Oh hell , that's amazing," says Brownlee.
Cars can be seen lying on their sides.
1200 tourists are stranded in Kaikoura. The Government is looking at options to try and help them get out.
Before leaving, Key said the failures of the 111 system last night were "deeply worrying."
He was commenting on the emergency services response to the large earthquake last night during including the fact that the 111 system experienced delays in the worst hit areas.
What happened to the 111 system would need reviewing to see what took place.
"I don't have an answer to what took place there but it obviously deeply worrying."
He was less concerned about the tsunami.
The best advice from GNS was that because the quake had been on land it wasn't going to cause a tsunami.
"The good news is we had very good systems and it was those indicators that measure the tide movement that alerted to us that the earthquake had moved the plates and moved out to sea."
There would be a debrief afterwards.
"Initially I think you've got to say things have worked pretty well."
Key said the office of Labour leader Andrew Little asked to join him on the tour which he readily agreed to.
Earlier today Key met Hungarian President Janos Ader who offered sympathy and support.