it's a horrific incident and has hit the news in my world (Germany) as well. Being a balloonist I am particularly interested in it.
It is not unusual for balloons to catch fire in an accident or incident, I know of a few. We just had one last summer in my country... hard landing with a blimp, tank burst open, a spark caused it to catch fire, killing the pilot (pax's were able to jump out at the last minute).
A few years ago a balloon flew near a high power radio transmitter mast. Somehow a spark transfered to the balloons electronics, causing the balloon to catch fire... killing all on board. Now all balloonist are told to avoid those masts if at all possible.
With hot-air balloons they run on propane gas, sometimes only a spark is needed to set it off. There is no way inflammable materials would help.... the propane can literally explode especially if one of the lines tear off and gas escapes.
Luckily these accidents are rare... but no less something to be investigated in and avoided in the future.
A very sad day for all balloonists...