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The pilot and five couples from the Wellington area, about 95 miles (150 kilometers) south of the crash site, were killed. Some of the bodies were badly burned, said Superintendent Mike Rusbatch, a police district commander in Wellington, the capital.
Rusbatch said it appeared the balloon's basket struck power lines that set a fire on board. Witnesses told local media of seeing 32-foot (10-meter) high flames rising from the basket of the dark blue and maroon striped balloon before it plummeted to the farmland below.
Bevan Lambeth said the basket was on fire "and the power lines were holding the basket down, but it was still about 50 meters (165 feet) in the air. Then the whole basket started to go up in flames," as the balloon broke clear of the electric lines.
"I saw ... (it) then go straight up in the air and the flames just engulfed the whole balloon and it crashed to the ground. When it came down it came down really quickly," he told TVOne News.
An aerial photo of the crash site shows two circles of black ash in a green field, close to a white house.
The burning balloon was just above the trees when David McKinlay saw it as he watered his garden.
"It looked like he (the pilot) tried to raise it a bit higher ... all of a sudden there was just 10 meters of flames," he said.
The balloon rose to 500 feet (150 meters) before dropping quickly, and turned to "just a sheer flame as it hit the ground" with a big bang, McKinlay said.
Rusbatch, the police commander, said two people jumped from the basket before it hit the ground, but did not survive.
"We believe we know who the victims were," he told the news Web site Stuff. "... A tragedy for those involved and their families."
The only victim publicly identified so far is the pilot and balloon owner, Lance Hopping. He was safety officer for the Balloons over Wairarapa annual event, and was considered an experienced and safety-conscious pilot.
New Zealand Transport Minister Gerry Brownlee expressed condolences to the bereaved families on behalf of the government.
"We are deeply sorry to learn of this tragic accident and our hearts go out to those who are now mourning the loss of life," Brownlee said.
New Zealand Transport Accident Investigation Commission manager Peter Northcote said the commission had opened an inquiry into the crash, and investigators were on the scene.
The crash was the deadliest air disaster in New Zealand since 1963, when a DC-3 airliner crashed in the Kaimai Range, killing all 23 passengers and crew aboard, according to the History Group of the New Zealand Ministry for Culture and Heritage.
In 1979, an Air New Zealand DC-8 airliner on a scenic flight slammed into Mount Erebus in Antarctica, killing all 257 on board.
Written and photos by Associated Press
Courtesy of YellowBrix - YellowBrix