Thirteen people had set off on board the balloon gondola, including eight skydivers, one operator and four passengers, when it crashed at around 7.50am local time in a rural desert area about 60 miles south of Phoenix.
The eight had all exited the balloon “without incident” before the incident unfolded, Eloy police chief Byron Gwaltney said in a press conference. Then, Mr Gwaltney said “something catastrophic happened”, causing the balloon to crash into the ground.
”What we know at this point is the skydivers were able to exit the balloon without incident and completed their planned skydiving event, and then shortly thereafter something catastrophic happened with the balloon causing it to crash to the ground,” said Mr Gwaltney.
Four people were killed while the fifth person was critically injured.
One of the victims was pronounced dead at the scene while the three others were rushed to an area hospital, where they later died.
The sole survivor from the craft was taken to a trauma centre in Phoenix where they remain in a critical condition. All of those on board were adults.
Family members of Katie Bartrom, 28, have since identified her as one of the people who died in the incident.
Ms Bartrom was a registered nurse from Indiana who loved skydiving and adventure, her mother Jennifer Hubartt told KNXV.
Ms Hubartt said her daughter had travelled from Indiana to Arizona with friends and that she was “really enjoying the experience and having fun and seeing a new place that she had never seen before”.
“She was a beautiful person,” she added.
The pilot is also believed to be among the dead, according to KNXV.
The identities of the other victims have not yet been released.
Micah Powell, mayor of Eloy, said a witness on the ground told authorities that, in the seconds leading up to the impact, the balloon appeared to be flying up and down. “The impact was fairly, fairly large,” he said in the briefing.
Though the exact cause of the crash is unknown, preliminary information suggests it occurred after the balloon had an “unspecified problem with its envelope”, according to the National Transportation Safety Board, which is investigating the incident.
Investigators are now speaking to witnesses and reviewing video of the incident to piece together what led up to the crash.