In your basket or off your trolley? A bit of both is the answer

'Welcome to Cappadocia International Airport," says Kaili Kidner, flinging open the door of our minibus in a rough area of scrubland next to a small pumpkin patch. You can sense this is a fairly well-used joke; it doesn't raise much of a laugh, but then it is 5am. As her sluggish passengers heave themselves out of the bus, Kaili is already halfway across the field, tussling with an outsized wicker basket which is apparently going to fly us up, up and away, out of the valley and 1,000 metres into heaven.

If you are planning to go up in a hot-air balloon, there aren't many better locations to do so than here. Cappadocia, in the South Central region of Anatolia, Turkey, is set on a massive geological fault line, and a series of volcanic eruptions millions of years ago left behind a tortured, twisted terrain looking like nowhere else on earth. Everywhere, great volcanic "fairy chimneys" reach into the sky, so ridiculously phallic that they look as if they could only have been carved by the hand of man.

"Cappadocia is absolutely the best place to go ballooning in the world," says Kaili. "Just look at the landscape." She explains that she and her partner, Lars, used to fly balloons in France, until Lars came to Cappadocia for a week to have a look. "He came back to get me saying, 'I've just found the place where we're going to spend the rest of our lives'." That was 12 years ago and they've been here ever since.

Flying conditions today are perfect, as they often are. "You can control the flight to within just a couple of centimetres," says Kaili. "It's incredibly precise." Even so, there's still a quick safety lesson to run through. In the unlikely event of a "giggly landing" - when the basket tips over and gets dragged on its side across the landing strip - the only thing to do, it seems, is to bend down and hold on for dear life.

We clamber aboard, eight of us, plus Kaili our pilot, while another identical balloon is loaded just a few metres away. Swedish-born Lars, it turns out, was part of the team that worked with Sir Richard Branson in his numerous world-record-breaking attempts. I try not to let this put me off.

The balloons are first filled with cold air then with bursts of burning propane gas, which lifts us slowly, shakily off the ground. It's a precarious feeling knowing that the only thing separating us from sure death is a piece of wicker-work no different to the type once used to transport groceries home from the market. We rise to 1,000 metres. "Doesn't it just make you want to throw yourself out?" says the Aussie standing next to me. I cling on, hankering for a seatbelt or parachute. "I think it does cross people's mind a lot," says Kaili, "because it would be so easy."

Fortunately, the views provide a welcome distraction. If Cappadocia is a remarkable place from the ground, from a height it's fantastical. There is an ethereal silence as we climb to catch the same air stream as Lars. A living geology lesson unfurls beneath us. Rupture lines from the volcanic explosions run through the land as clear as rivers, and the world below is spliced into its component parts of hard rock, soft rock and layer after layer of tuff where the lava once fell. Apparently, this is where George Lucas originally wanted to make Star Wars. You can see why.

We rise up over the small town of Goreme and set off round a clutch of spires towards the rocky outcrop of Uchisar. Everywhere, the rocks are pierced with tiny windows and doors; until 30 years ago, Cappadocians wouldn't have considered living anywhere but in caves carved from these stony protuberances. In the distance we see Monk's Valley near the village of Zelve, where so keen were the local hermits for a bit of peace and quiet that cave dwellings were dug at impossible heights. We drift on; past white, rippled Honey Valley, which looks like someone has squeezed a big dollop of meringue on to the landscape, and on through Pigeon Valley before catching a glimpse of Rose Valley, gloriously pink in the morning sun. Visibility, says Kaili, is roughly 130km. In the south we can see the Melendiz mountain range and faintly, in the far distance, we can just about pick out the Taurus Mountains - the gateway to Cappadocia.

As we float on, it becomes clear that fairy chimneys aren't the only thing Kaili needs to navigate around. Traffic is heavy. At one point we count another eight balloons in the sky. Seeing the bulbous balls of colour rise up from behind the cliff faces is astonishing - although Kaili doesn't think so. Twelve years ago you'd have been hard-pressed to get a balloon ride anywhere in Turkey. Now there are four companies operating, all right here in Cappadocia.

In some ways, the story of ballooning here mirrors the story of Cappadocia itself. I visited the area 12 years ago, the same year that Lars and Kaili arrived. Back then, Goreme had a few pensions, a lively local backgammon scene and a friendly mayor who personally saw to it that we were given a guided tour. When tourism started booming in the mid-1990s, the locals realised the value of their phallic landscape and turned many of the old cave dwellings into hotels. Perhaps it's something to do with the ancient, primeval terrain but it became a place beloved of Australians in particular. Now, the Flintstones Cave Bar and the Down Under Carpet Shop are testament to the volume of Aussie backpackers who pass through. "We have more and more travellers coming to get drunk in the bars of Goreme," says Halis, our guide. These days, if you're looking for somewhere more relaxing, Urgup, with its stock of fine cave hotels and good local restaurants, is the place to go.

It was just as the finishing touches were being made to the monstrous new hotel plonked obscenely close to Cappadocia's Love Valley that everything changed. First there was 9/11, then the war in Iraq and then the bombing of the British embassy in Istanbul. Overnight, the tourists dried up and the average price of a cave room fell from L150m (£56) to L90m (£34) a night. Even on a Saturday afternoon in high season, Goreme's famed open-air museum is deserted. Arguably, there's no better time to go.

The downturn has also put a stop to the often illegal building that was blighting the landscape. The Save Goreme Committee, which had been formed to try to halt the destruction, has had its work done for it.

Looking down from the balloon it's surprising how much of the land, which from the ground seems like a hotchpotch, is neatly sown with the old Cappadocian staples of grapes, apricots, potatoes and pumpkins. This is, after all, a place which, in many ways, has not changed for centuries. Locals travel in horse and cart, the land is fertilised using pigeon droppings, and in the nearby town of Avanos, they still make pots with clay scooped straight from the banks of the nearby Kizilirmak River. "If you can't make pots here," says Zaki, a master potter, "you don't get married."

We fly on over Uchisar. Kaili steers so close to the rock face that, judging by the bleary faces at the windows, for many, our balloon is their wake-up call. We brush the top of a walnut tree and Kaili reaches over and picks a handful for breakfast. "In England you wouldn't be able to do this," she says. "There are so many rules and limits to how low you can go. For me that's simply not flying."

We neatly skirt the local mosque's minaret, cross low over the main road and pull up just as a nearby pylon gets a little close for comfort. Kaili's 22 years of flying experience is evident as she deftly steers the basket to land on the trailer ready to tow back to the depot. A welcome party is there to greet us. They pounce on the balloon and have it neatly folded away in the time that it takes Kaili to hand everyone an ice-cold glass of her signature tipple - the "Cloud 9" champagne cocktail. It's not often you get the chance to quaff champers before 9am, and if you need a good excuse, they don't get much better than this.

GIVE ME THE FACTS

How to get there

Exclusive Escapes (020-8605 3500; www.hiddenturkey.com) offers three nights at the Kayadam Cave House for £675 per person, based on two sharing. The price includes return flights from Heathrow to Kayseri via Istanbul, transfers, three nights' b&b and two day's guiding. A one-hour balloon flight with Kapadokya Balloons can be booked through Exclusive Escapes for £100 per person.

Further information

Turkish Tourist Board (020-7355 4207; www.gototurkey.co.uk).