On 28 September 2012, the Dornier 228 serving the route crashed while attempting an emergency landing at Kathmandu shortly after takeoff, killing all 19 people on board.

While at an altitude of 50 feet (15 m), the pilot reported technical issues with the aircraft, and requested to fly back to the airport.

[4] This was noticed by Kathmandu's air traffic controller, as the aircraft began to sway and do unusual manoeuvres.

It then nose-dived, narrowly missed a slum and crashed on the banks of the Manohara River and caught fire.

Eyewitnesses stated that several people survived the crash and were screaming for help inside the burning wreckage.

However, Sagar Acharya, the airline's head of flight safety, denied the aircraft was carrying too much weight.

This bird strike report was confirmed by the air traffic controller on duty, as the air traffic controller stated that the pilot contacted Tribhuvan's Tower for an intention for emergency landing due to "technical glitches", possibly due to a bird strike.

Based on the ATC statements, the right engine of Flight 601 might have been hit by a bird and caught fire.

Investigators inspected the CCTV footage of the crash, and noticed that a flash had occurred on the right engine of Flight 601, approximately 5 seconds before rotation.

The NAAIC then reported that the aircraft was not able to maintain 77 KIAS in level flight suggesting that one engine had failed and the other had suffered a power loss of at least 13%.

[13] An analysis later was made by the NAAIC:[14][additional citation(s) needed] "It is possible that the bird momentarily disturbed the air flow into the engine before it was struck by the propeller, causing a surge and the suspected flame seen in the CCTV footage, but the engine manufacturer considered this unlikely.

If the flame seen in the CCTV and accompanying 'bang' heard on the CVR were evidence of an engine surge, then another possible cause is a fuel flow problem.

It is therefore possible that at about 6,200 kilograms (13,700 lb) with one engine at 100% power and one engine at flight idle, there would have been insufficient thrust to maintain 77 kt, and the additional drag on one side would have affected controllability more than in the OEI case"[13] Investigators stated that the power loss occurred at 70 KIAS, while V1 was at 83 KIAS.

NAAIC stated that the crew possibly didn't recognize the power loss because it occurred gradually and progressively rather than instantaneously.

The investigation stated that the crew were likely opted not to land back to the airport because of company policy to continue their flight for an engine malfunction at or above V1.