VANCOUVER, British Columbia - A hot air balloon burst into flames over western Canada, burning two passengers to death while their families looked on, police said Saturday. Other passengers leaped to the ground, some with their clothes in flames, witnesses said.

Eleven people were seriously injured when the balloon crashed Friday evening in a recreational vehicle park in Surrey, British Columbia, a suburb of Vancouver. There were 12 passengers and a pilot on board, police and witnesses said.

Royal Canadian Mounted Police Sgt. Roger Morrow said relatives of the two passengers killed witnessed the fire. He declined to comment on reports that the dead were a mother and her grown daughter.

"It's just tragic. They watched it unfold before their eyes," Morrow said of the families. "The fatalities suffered from burns."

Smoke could be seen for miles away, and onlookers in Blaine in Whatcom County reported seeing the crash.

Snohomish County reaction

 In Snohomish County, employees at Aerial Balloon Company are closely monitoring the investigation.

Chief pilot Tom Hamilton says this kind of accident is extremely rare -- likely due to a failure in the propane fuel line.

He says commercial companies in the United States routinely inspect their balloons to prevent similar accidents.

"These are federally-registered aircrafts, they must be maintained just like a 747," he said.

How it happened

The balloon caught fire as it prepared to launch, said Bill Yearwood, an investigator with the Transportation Safety Board of Canada.

"The crew loaded 12 passengers and was preparing to launch when a fire erupted. The pilot asked the passengers to get out of the basket," he said. "The balloon was tethered at the time, but then broke and came loose," he added.

"They were all trying to get out."

After most of the passengers escaped, the balloon exploded in a fireball and shot up into the air. Shortly after, the burning balloon plunged to ground in the RV park, leaving a tail of thick black smoke in its wake.

"I can't tell you what exactly happened when the balloon was loosened from the tether," Yearwood said. "We will be talking to attending crew members and the pilot to find out."

He said the pilot was in stable condition.

"The thing went up about 400 feet in the air at which point it melted enough of the balloon -- it collapsed," said Don Randall, a resident of the trailer park who took pictures of the scene. "The basket was basically a fireball. It just dropped like a stone," he added.

"I'm just thinking, 'Oh geez, I hope there's nobody in that thing. It's basically a burning death up there,"' he said.

Smoke could be seen billowing from the crash site from miles away.

Another resident, Karen Ashby, held back tears while she explained how she watched the coroner sift through the blackened wreckage.

"They found the bodies in here," Ashby said. "I watched them take them out."

The cause of the accident was not immediately known. Weather conditions were clear at the time of the sunset flight.

"People were screaming and trying to get out," Frank Hersey said Friday night near a grassy field where several of the injured were being attended to by ambulance crews.

Perry Kendall said he saw what looked like something out of a movie.

"It was horrifying," said a shaken Kendall. "Just looking at people screaming and jumping out of there. Some of them, I think, had fire on their clothes. It was just awful."

Witnesses also said propane tanks from the balloon shot off and landed on the Hazelmere RV park below, setting fire to three trailers and several vehicles. No one was reported hurt in those blazes.

"We're exceptionally lucky that nobody in any of these three trailers or in the vehicles that were destroyed were caught in them," Morrow said.

Don Randall

A hot air ballon catches fire over Surrey, B.C. with 13 people on board, Friday, August 24, 2007.

The hot-air balloon, which CTV reported was operated by Fantasy Balloons Charters based in Langley, British Columbia, was one of several balloons in flight at the time.

"The company deeply regrets this evening's incident and all injuries associated with it (and) inconvenience to those people being displaced," said John K. George, a company spokesman.

There was a similar accident earlier this month in the central Canadian province of Manitoba, Manitoba, where 12 people were injured.