The hole in the plane's side appeared shortly after take-off from Mogadishu at 10,000ft (3,048m), a colleague of one of the passengers told the BBC.
It is not clear what caused the damage. Officials say two passengers were hurt.
The Daallo Airlines flight, bound for Djibouti, was carrying about 60 people on board, a police officer at the scene told the Bloomberg news agency. Read more on bbc.