A pilot made a mayday call, saying he had lost control of one of the two engines, PIA Chairman Azam Saigol said.
"We were confident that the plane could land with one working engine," Saigol said. "This is a tragedy. We are not absolving ourselves of any connection to this incident."
Saigol said it's "highly unlikely that this was a terrorist attack." He added that the bodies of the victims would be transferred to hospitals in Islamabad at 12:30 p.m. local time.
500,000 rupees ($5,000) cash will be given to the next of kin of the 47 victims to meet funeral expenses, according to a statement released by PIA Thursday.
The airline said Flight PK-661 was carrying 42 passengers and five crew members when it lost contact with a control tower on its way from Chitral to Islamabad. It crashed into the mountains near Abbottabad and Havelian.
Two infants were among the passengers, according to a passenger manifest provided to CNN by Pakistan International Airlines.
Pakistan's National Disaster Management Authority said 46 of the 47 bodies have been recovered.
Pop star-turned-religious artist Junaid Jamshed
was among those on board, his manager, Arsalan Khan, told CNN.
Jamshed soared to fame in the 1980s with Vital Signs, one of the most iconic pop bands in Pakistan.
After a successful career as a solo singer in the 1990s, Jamshed gave up pop stardom to focus on religious music, or nasheeds.
His last tweet, posted Sunday, showed pictures of "Heaven on Earth" in Chitral, the northern Pakistan city where the plane took off.
The aircraft was an ATR-42 twin-engine propeller plane. The aircraft's manufacturer, ATR, is a joint venture between Airbus Group and Italy's Leonardo.
Experienced pilot, regularly checked plane
There were three cockpit crew members aboard the flight: a captain, a first officer and a trainee pilot. PIA spokesman Danial Gillani told CNN that the captain, who had over 12,000 hours of experience, was flying the plane.
The airline's chairman said the was also a flight trainer for the ATR-42 plane.
The ATR-42 that crashed was made in 2007 and had been flown for 18,740 hours, Saigol said.
"The ATR plane was a sound plane," the chairman said. "We have 11 other ATRs. Every 500 hours, these planes are checked, and this plane had been last checked in October."
Searchers have recovered the black box from the plane, Pakistan's military said. But the cause of the crash remains unclear.
Saigol said international agencies will help investigate the cause of the crash.
Pakistan, with about 190 million people, has thriving domestic air operations. But it has a checkered air safety history and suffered three fatal commercial air crashes in 2010 that claimed 185 lives, according to the Aviation Safety Network.
Wednesday's crash is the first major airliner accident in Pakistan since 2012 when a Bhoja Air Boeing 737-200
crashed in bad weather while on approach to Islamabad.