Transcript for Hot Air Balloon Catches Fire at Mid-Atlantic Balloon Festival
story that is still developing as we come on the air. It was supposed to be a fun mother's day weekend event. But this hot air balloon festival in Virginia turned into a nightmare, with this balloon carrying, we believe, three people, catching fire. It was a horrific scene. Eyewitnesses say after the balloon erupted in flames, there were screams for help and then explosions. So many questions right now. What exactly went wrong? And could there be survivors? We have team coverage this morning, starting with David Kerley in Virginia. David? Reporter: The real question this morning, where are those three people and the basket they were riding in at the time of this event? With daylight, now, the search is going to intensify in the woods and the areas around here. The whole basket is on fire. Oh, my god. Reporter: Spectators watched in horror as the hot air balloon hit electrical wires while landing, burst into flames and started climbing out of sight. Still traveling in the air. Reporter: The basket engulfed in flames. It blazed up really high. And then, when it did a big blaze, it just -- it was gone. Reporter: It was the third balloon on an evening flight, landing as part of the mid-atlantic balloon festival. Onboard, a pilot and two passengers. The hot air balloon that crashed into the wire, that is on fire. Subject has bailed out of the hot air balloon. Reporter: A couple saw it all from their home and shot this video. We thought that the balloon was just going to just catch fire, and land in the field. But instead, it kept rising. And we could see the two passengers inside of it. Just standing there, hoping we could do something. Reporter: Hours later, officials unable to find the basket, the balloon or those onboard. Here's what experts think may have happened. Hitting the wires ignites the basket. That added heat to the fire. Immediately sends the balloon rocketing skyward. There's explosions and the basket and balloon separating. All this over a wooded area as daylight is fading. It's a very rural area. Because of the terrain, heavy woods, and also the darkness, it's working against us right now. Reporter: The mid-atlantic balloon festival says, quote, it regrets there was a safety incident involving one of the balloons. It has cancelled the rest of this event. The national transportation safety board is going to investigate this incident. But really, the primary effort at this hour is try to find the balloon, the basket and the three people who were inside.
This transcript has been automatically generated and may not be 100% accurate.