The Australian Transport Safety Bureau (ATSB), which is investigating the incident, said that the fire was caused by an in-flight burner on the balloon.
"The pilot, one of Australia's most experienced commercial hot air balloon pilots with approximately 5,500 hours in command, flew the aircraft under challenging circumstances and managed to land the balloon safely, then evacuate the 15 passengers and himself," the National Commercial Ballooning Industry said.
A 27-year-old woman was taken to hospital for a check-up and monitoring after the balloon made the emergency landing.
The moment a hot air balloon caught fire during a terrifying flight over the Yarra Valley. 15 people were onboard the flight. A 27-year-old woman was taken to hospital for observation. The basket was destroyed during the blaze. #7News pic.twitter.com/JUpcKRxkKg— 7 News Melbourne (@7NewsMelbourne) December 26, 2018