From fifth on the grid, Perez made a good start and at the first corner he tried to go around the outside of poleman Charles Leclerc and his own team-mate Max Verstappen.
The Ferrari hit his rear wheel and pitched him up into the air and into the run-off area.
Perez was able to get back to the pits but the team soon determined that the damage was too extensive for him to be able to continue.
“I’m absolutely gutted to see Checo go out on the first corner,” said Horner when asked by Motorsport.com about the incident.
“He had probably his best start of the season, got the draft and the tow from the three cars ahead, so arrived with massive over-speed.
“And you can’t blame him, at his home race, going to try to take the lead of the grand prix. I think you’d have to call it a racing incident, because three into one doesn’t go, and Charles, obviously, couldn’t get out of it and he braked late.
“Frustrating for Checo, and really disappointing for his fans to lose him at the first corner. The guys did their best to get him back out but there was just too much damage to the floor and underbody of the car. You could see on the replay that Charles was in a bit of a Red Bull sandwich.”
After his retirement Perez visited the pit wall, where he was consoled by his team boss.
“It’s a tough moment for him,” said Horner. “It’s in front of his home crowd, and he was very emotional, and I just said to him, ‘The next race is next week. You’re going for the lead in your home race, you wouldn’t be a racing driver if you weren’t going for it’.”
He added: “I think he would have been on the podium for sure without a shadow of a doubt. It’s a big loss for him here with a car that was capable of being on the podium.”
Horner insisted that Perez and Verstappen would have been allowed to race each other.
“It would have been a straight fight between the two of them,” he said. “So it could have been an interesting afternoon.
“Checo had good pace this weekend, it’s just frustrating that it was a first corner incident. That was my fear going into the race.”
Perez’s retirement gave Lewis Hamilton, who finished second, a chance to close the gap in the battle for the runner-up spot in the world championship.
“He’s got three races to convert that second place,” said Horner. “There are 20 points between him and Lewis. He’s had some misfortune, he’s had some issues, but we still believe he can do it between now and the end of the year.
“He’s a tough operator, and that’s why he’s in the car, because mentally, he’s always been able to bounce back. He’ll brush himself down and he’ll turn it into motivation.
“A sprint race in Brazil. Las Vegas, a street circuit, he’s always run well at street circuits. Abu Dhabi, he’s always been competitive there as well.
“He’ll have the full support of the team to try and achieve something that we’ve not done before.”
