The basket was carrying 11 passengers and the pilot, and "some" passengers were ejected and sustained injuries.
At the time of the crash, passenger Malcolm Porter told the Otago Daily Times two passengers were ejected. He said it was like "coming down a lift at a hotel, full flight, and then just stopping dead."
In each incident the pilot was not wearing a harness, the report says, and everyone on board was at risk of injury when the aircraft became pilotless and out of control at a safety-critical phase of the flight.
TAIC is recommending the wearing of pilot restraint harnesses during critical phases of commercial balloon flights be mandatory.
Current Civil Aviation Rules specifically exempt balloon pilots from having to wear harnesses during takeoff and landing.
The preliminary report has been released in the initial stages of the investigation to publicise particular facts and circumstances in the interests of transport safety. The formal findings will be released at a later date.