The company which operates the balloon which crashed near Arrowtown this morning says it is "deeply upset" about the incident and has temporarily suspended its commercial operation.
Eleven people were injured after a hot air balloon crashed while landing near Arrowtown about 9.55am.
Two people were seriously injured and taken to Dunedin Hospital by helicopter. Southern District Health Board said they are in a serious but stable condition.
Locally-owned business Sunrise Balloons, which operates the balloon, issued a statement this afternoon saying the 10 passengers were a mix of individuals and groups, and were understood to be all resident in New Zealand.
Pilot Carrick McLellan - son of owner Hugh McLellan - was treated at nearby Lakes District Hospital for moderate injuries and eight passengers were assessed at the hospital for a range of minor injuries before being released, the company said.
"The approximately one-hour flight had passed uneventfully, operating within its normal wind parameters, as it came in to land at a landing area on a private airstrip in Morven Ferry Road," the company said in a statement.
"On approach, the balloon was caught by a sudden wind gust and the basket containing passengers impacted with a low bank."
The company said the balloon basket "came to rest alongside a fence and trees near a property driveway".
"In the immediate aftermath of the incident, some balloon fabric became draped over a subsidiary power line to the house."
The company said it had been operating in the region for 23 years without incident. It had temporarily suspended its commercial operation and was co-operating fully with police, Civil Aviation and the Transport Accident Investigation Commission.
Owner and chief pilot Hugh McLellan said the company was "deeply upset" about the incident and the injuries sustained to their staff and guests.
"We are fully supporting our staff and guests at this difficult time, and we wish all involved a full and speedy recovery.
"An internal investigation is underway and we are working closely with all relevant authorities."
Balloon bounced 100m before landing - farmer
The balloon came to a stop on Phillip Bunn's land. Bunn told Checkpoint it appeared a gust of wind carried the balloon away, bouncing it across a paddock for 100 metres before it went through a fence and ended up on its side against a tree and draped over powerlines right outside his house.
Two of his sisters were home at the time - one witnessed it and the other heard screaming.
People were conscious, but some had broken arms and legs, Bunn said. Emergency services arrived on the scene very quickly.
Bunn said he knew the pilot quite well and he was able to walk after the crash. He understood the two people with serious injuries were thrown out of the balloon when it was attempting to land.
Bunn said he was only guessing "but it must have hit the ground and then it bounced, the balloon, it must have caught it on a corner because the balloon spun around as it hit, I was told."
TAIC, Civil Aviation Authority launch investigations
The Civil Aviation Authority (CAA) has launched a health and safety investigation into the crash.
Deputy Chief Executive David Harrison said the authority's investigation is separate to the one led by the Transport Accident Investigation Commission (TAIC).
"Our CAA teams will be looking at work related practices to ensure all approved and appropriate procedures and processes were in place and followed by the operator and its employees," Harrison said.
"We will be working closely with TAIC and first responders as well as any witnesses who may have seen the accident."
A senior CAA investigator has been assigned to the case and is already liaising with TAIC, CAA said in a statement.
"The separate investigation provides a further layer of critical evaluation to ensure safe practises were in place or to identify any areas that may need closer attention with the aim of giving people confidence they are safe when travelling by air in any form." Harrison said.
The Transport Accident Investigation Commission's spokesperson Simon Pleasants said two investigators travelled to the area today and are expected to visit the crash site tomorrow morning.
The CAA said it would not comment on the incident further during the course of its investigation.