Emergency personnel conduct search operations in the water near the site of the crashed TransAsia Airways plane in Taipei on Friday. The pilot of the doomed plane was hailed as a hero for his actions in the final moments before the crash. [Photo/AP]

The pilot of the crashed TransAsia Airways plane was still clutching the joystick when his body was found in the cockpit, reports said on Friday as the airline faced sanctions over its second fatal accident.

Pilot Liao Chien-tsung, 41, was among at least 35 people who lost their lives in the accident on Flight GE 235 in Taipei, Taiwan, on Wednesday.

Fifteen people survived, and rescuers are still searching the river and submerged wreckage for another eight who remain missing.

Liao has been hailed as a hero for apparently making a last-ditch attempt to steer the turboprop plane, with 53 passengers and five crew members on board, away from built-up areas during its steep descent, avoiding more deaths and damage.

His body was found in the cockpit still holding the joystick with both hands, and with his legs badly fractured, the Taipei-based China Times newspaper said.

"He struggled to hold onto the joystick till the last moment before the plane plunged into the river, in an attempt to control its direction and to reduce casualties," the report said, citing unnamed prosecutors investigating the case.

Taiwan leaders and people have mourned Liao, with major newspapers running front-page tributes hailing him for saving many lives.

The TransAsia Airways ATR 72-600 crashed shortly after takeoff from Songshan Airport, hitting an elevated road as it banked steeply away from buildings and into the Keelung River.

As hundreds of rescuers and divers battled bad weather to search for those still missing, with four more bodies retrieved on Friday, authorities banned the airline from applying for new routes for one year in the wake of the latest incident.

Wednesday's accident, which occurred on a domestic route to the island of Kinmen, was the second fatal crash for TransAsia after a July disaster that left 48 people dead.

"We have imposed a one-year ban on TransAsia from applying for new routes as a penalty," said Civil Aeronautics Administration director Lin Tyh-ming.

Taiwan media said the authorities were looking into allegations against the airline, including labor shortages and insufficient training, which could have affected safety standards.

"There is a manpower shortage of pilots ... TransAsia has to recruit pilots with less experience from other companies after more than 20 of its pilots went to two newer airlines," the Apple Daily said, citing unnamed sources.