The plane was climbing above the scenic South Island's mountain ranges on Saturday afternoon, bound for Sydney, when a bang shook the cabin.
A passenger seated nearest the left wing soon shouted "the engine's on fire", Ms Loch recalled, as the cabin lights began to flicker.
Footage recorded by a passenger and shared with AAP shows flames appearing to issue from the plane's left engine in a series of rapid bursts.
"I was sitting on the left-hand side of the plane, and the flames were very, very visible," Ms Loch said.
"There was a lot of screaming at the time."
As the plane continued to gain altitude, Ms Loch tried to comfort herself by recalling that modern jets could land safely on a single engine.
"That's what I kept in my head, that we could actually fly on one engine," she said.
"But the flames kept coming and the noise kept coming."
QF122 suffered a suspected engine issue shortly after taking off from Queenstown on Saturday afternoon, before making a priority landing at Christchurch.
According to Flight Aware, the Boeing 737 landed about 52 minutes after take-off, touching down shortly before 5pm local time.
The cause of the incident has yet to be determined, but Qantas sent two engineers to Christchurch on Sunday to investigate.
Both engines are thought to have remained in operation for the duration of the flight.
Ms Loch said conditions soon stabilised after the initial shock, while cabin staff took pains to comfort passengers.
"The crew were all terribly, terribly calming," Ms Loch said.
Emergency services were waiting on the tarmac when the flight landed, with passengers allowed to disembark as normal following a short wait.
"There were massive cheers when we landed," Ms Loch said.
A Qantas spokesperson said the plane was believed to have suffered an engine issue and steps would be taken to support affected customers.
"Our pilots are highly trained to manage situations like this and the aircraft landed safely," they said.
"We know this would have been a distressing experience for passengers and will be contacting all customers to provide support."
Affected passengers were put up in a hotel near the Christchurch International Airport before being booked on a complimentary flight to Sydney on Sunday.
While the second flight went off without a hitch, Ms Loch said nerves were still high.
"I cried getting off the plane when we landed in Sydney," Ms Loch said.
"It was quite traumatic."
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