On 18 March 1998, the Saab 340 operating the flight crashed into the ocean shortly after takeoff in a severe right bank, killing all 13 occupants on-board.

[1] The investigation determined that the failure of a crucial electrical system, combined with flying in total darkness and a low cloud ceiling, led to the loss of control of the aircraft.

[1]: 4–5  53-year-old mechanic Wu Kai-ying was also on-board, who had been working on the Saab 340 ever since he was hired by Formosa Airlines 8 years previously.

[1]: 34  Captain Fei decided to continue the flight to get the plane to an airport where it could be repaired, but his statements on the Cockpit Voice Recorder (CVR) following taxi clearance revealed that he was uncomfortable with this decision.

Among the inoperative systems were the autopilot and the yaw damper, which meant that the pilot in command had to fly the aircraft manually & make active rudder inputs throughout the entire flight, except that the latter was not done.

However, 30 seconds after takeoff, probably in an attempt to equalize the temperature difference between the two engines, the crew reduced the right Power Lever Angle (PLA).

Air Traffic Control (ATC) cleared the flight to turn left at a heading of 260° and maintain an altitude of 3,000 feet, and the First Officer acknowledged the request.

[1] Ten seconds after First Officer Hung responded to ATC, Captain Fei exclaimed that he had a problem with the heading and asked for help with the magnetic compass.

Observer Cheu replied, "Um," but neither he nor the co-pilot made any significant response, probably because they were either in a state of confusion or unable to act.

The situation in the cockpit was chaotic, the aircraft was pitching down even more and rolling at an angle of 71 degrees to the right, First Officer Hung responded to the captain by asking, "Sir, shall we look at this one?".

Two seconds later, ATC again asked the flight to confirm their heading, at which point the overspeed warning went off at an airspeed of 245 knots.

The flight taking place at night in Instrument Meteorological Conditions (IMC), pilot fatigue, and system failures probably contributed to the loss of situational awareness and spatial disorientation, which caused the aircraft to bank further and further to the right.