A Dubbo man thought he "was about to die" at the point passengers smelt smoke and saw one of two propellers stop spinning during their flight to Sydney.
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It happened about 10 minutes into QantasLink flight QF 2039 on Friday afternoon, according to Jamie Riley, who had been on his way to Sydney for surgery.
"The seatbelt light had just gone off and the stewardess went to get drinks," he said.
"We could smell smoke, which was not a great sign, then she went back to her seat and put on her seatbelt.
"We could see the propeller on the left side of the plane had stopped.
"You could see fear in some of the passengers' faces. The guy behind me was quite calm and was reassuring us. He said, no point worrying, there's not much we can do about it."
Mr Riley said the pilot informed passengers an engine had been shut down to a problem with the oil pressure and the aircraft would be returning to Dubbo.
"A few of us clapped when we landed and thanked the stewardess on the way out," he said.
Mr Riley decided against taking another flight to his destination.
"It scared the s--t out of me, I drove to Sydney instead," he said.
"I think most of us were quite scared.
"I'm not a great flyer in the first place, and as it happened I'd overheard someone in the airport before take-off say they were running late because an earlier flight had issues, so that was in my mind as well."
A spokesperson for the Australian Transport Safety Bureau (ATSB) said the bureau had received a report of an incident involving a Dash-8 aircraft on Friday afternoon.
He said the ATSB would seek more information from the operator and determine whether to conduct an investigation.
Mr Riley re-posted a photograph on social media site Twitter that showed a view from the left window of an aircraft with a stationary propeller.
"My view in @Qantas qf2039 from Dubbo to Sydney," he wrote.
A Qantas representative replied online, "We hope you enjoyed the flight with us Jamie", to which Mr Riley responded "no!!! Not when an engine cuts out."
The Qantas representative then directed Mr Riley to an online form to register his complaint.
The Daily Liberal attempted to contact QantasLink but did not receive a reply at the time of going to press.
