The plane was a McDonnell Douglas MD-83, registered as 5N-RAM, built in 1990 and originally delivered to Alaska Airlines. After Alaska retired its MD-80 fleet in 2008, the aircraft sat in storage at Southern California Logistics Airport before Dana Air acquired it in February 2009. By the time of the crash, the airframe had accumulated more than 60,800 flight hours. Its engines carried 55,300 and 26,000 hours respectively. The last maintenance had been performed just one day before the accident, on June 2. Among the 147 passengers were prominent Nigerians: Ehime Aikhomu, son of former Vice President Augustus Aikhomu; Ibrahim Damcida, former Permanent Secretary of the Ministry of Finance; and Levi Chibuike Ajuonuma, spokesperson for the Nigerian National Petroleum Corporation. The multinational crew comprised an American captain, an Indian first officer, an Indonesian flight engineer, and three Nigerian flight attendants.

When the left engine anomaly appeared, the crew did not consult their emergency checklist. Captain Waxton, a 55-year-old pilot with 18,116 flight hours and 7,466 on the MD-83, speculated that a ground crew member had tampered with a panel near the rear door, apparently connected to a pre-departure dispute over the use of that exit. The pilots attempted to contact the control tower at 118.1 MHz for landing directions but were unsuccessful. Flaps were set to 28, and Waxton told the flight purser to prepare for landing. Throughout this sequence, neither pilot declared an emergency. The Accident Investigation Bureau later concluded that incorrect assembly during engine overhaul at Miami-based Millenium Engine Associates had severed the fuel lines to both engines. When the second engine lost power during the final approach, the aircraft had neither the altitude nor the energy to recover.

The MD-83 slammed into buildings in the Iju-Ishaga neighborhood. The explosion was so violent that many residents initially believed it was an attack by Boko Haram, the terrorist group that had bombed a church in Bauchi State just hours earlier. Thousands of Lagos residents rushed toward the site. Soldiers tried to disperse them with punches and rubber whips; the crowd threw stones in response. The chaos delayed firefighting efforts, and the fire consumed the entire aircraft except for the tail section. Forensic analysis later revealed that 27 passengers seated at the rear of the plane had initially survived the impact. None survived the fire that followed. Rescuers eventually recovered 152 bodies, most severely charred. Of 148 identified, nine were not listed on the flight manifest. The bodies of Captain Waxton and First Officer Rathore were never identified.

President Goodluck Jonathan declared three days of national mourning and pledged to boost aviation safety. The federal government suspended Dana Air's license and banned the MD-83 aircraft type. A nine-member panel was convened to audit all Nigerian airlines. Yet the suspension lasted only three months: by September 2012, Dana Air's license was restored and recertification began. The Nigerian Senate called for the removal of Harold Demuren, Director-General of the Nigerian Civil Aviation Authority, and the House of Representatives accused the NCAA of failing to provide a qualified inspector for the MD-83 type. Demuren was eventually removed in March 2013. A coroner's inquest exposed further failures: the Nigerian Airspace Management Agency's emergency response team had not acted after the pilots reported engine trouble, and the search and rescue operation was found to have been uncoordinated and haphazard. Dana Air offered families of the deceased $100,000 per passenger in compensation.

The Accident Investigation Bureau, with the U.S. National Transportation Safety Board serving in an observer role, determined that both engines had generated little to no power at the time of impact. Damage at the crash site was consistent with low-to-no RPM. Both engines were shipped to the United States for teardown, which confirmed that the fuel line assembly error at Millenium Engine Associates had prevented fuel from reaching either engine. The AIB's final report identified the cause as dual-engine failure from incorrect maintenance, compounded by the flight crew's failure to declare an emergency when the first engine malfunctioned and their decision not to follow standard checklists. The crash exposed systemic weaknesses: aging aircraft acquired from foreign carriers, maintenance outsourced to facilities with inadequate oversight, and a regulatory environment that struggled to enforce its own standards.