The customary/traditional Hebrew reading is "he saw". The Radak (a medieval biblical commentator) states that some people read "and he was afraid" and that there's no literary necessity to do so, he "saw" that he was in trouble, and he fled. The Jonathan Aramaic translation (which is from around the 7th century) also renders "he saw".
The emphasis of the chapter (i.e. the first 14 verses, which comprise one literary unit) is
clearly a spiritual one. The narrative of Elijah's escape is merely the setting under which he expresses his spiritual frustration in the idolatrous nation. He time and time again emphasises not that he's afraid for his life, but that his mission as spiritual guide is failing (which relates to the whole story of God taking him to the mountain and explaining that God isn't in the wind or fire etc. But we won't get into that). As such, I think the better reading of the verse is not to emphasise his mortal fear, but rather to emphasise that he "saw", he saw and understood that despite his attempts to show the nation the true God, he's still failed.
The verse could have but didn't use words that would support the reading that "he was afraid". Like Jeremiah 26:21 "and he was afraid and he escaped". Here, Elijah didn't "escape" but merely "got up and left". Again, he clearly was doing the sensible thing and running for his life, but that's not the textual emphasis of this section. If we take all uses of this exact word in this precise form, with accepted readings of "he was afraid", there are seven in the Old Testament (Samuel I 18:12, 21:12, 28:5, 28:20, Samuel II 6:9, Jeremiah 26:21, Chronicles II 20:3). Three of these seven have some extra emphasis describing "great" fear. Again the author chose not to emphasise the fear, which I see as support for the reading of "he saw".
All said and done I believe "he saw" makes more contextual sense. That said, maybe the author's intention was to be able to read it both ways - and "he was afraid" is a kind of subtext, or secondary, poetic connotation. Even if so, "he saw" seems to me to be the primary intention.