A Susi Air Cessna 208 Grand Caravan turboprop crashed near Indonesia's Sugapa airport while attempting a landing this morning.
The aircraft had "almost touched the runway" when the pilot aborted the landing and "commenced high altitude again", said an airline spokesman.
"We had some information that there were children passing by the runway, so maybe the pilot took the decision not to land," he added.
The aircraft, registration PK-VVG, took off from Nabire, Papua, at about 08:50 local time and was due to land at Sugapa airport when it lost contact with the control tower.
The weather was clear although the airport is in a hilly area, said the spokesman.
The wreckage of the 21-month-old turboprop was located about 1km away from the edge of the runway, he added.
One of the two pilots on board the cargo flight, a Spanish national, died following the crash.
Investigations into the crash are ongoing.
Susi Air operates a fleet of 29 Cessna 208 Grand Caravans.