Luxor is among Egypt's top tourist draws. Visitors go to see ancient temples and tombs, and travel sites often recommend the hot air balloon trips.
The last hot air balloon accident in Luxor occurred in 2009, when 16 foreign tourists were injured after a balloon struck a cell phone transmission tower.
Until Tuesday's incident, the deadliest accident in recent memory took place in 1989, when 13 people were killed as two hot air balloons collided in Australia.
Egyptian government spokesman Alaa Hadidi announced that the Cabinet will form a committee from the Ministry of Civil Aviation to investigate Tuesday's accident, EgyNews said.