Friday, December 6, 2013
The Associated Press
LONDON - A fire aboard an empty 787 at Heathrow Airport spooked Boeing investors Friday, as they feared the re-emergence of battery problems that grounded the plane for months earlier this year.
An Air Ethiopian 787 Dreamliner sits at Heathrow Airport in London on Friday after a fire started on board the empty aircraft. Boeing, maker of the 787, saw its stock dive largely on investors’ concerns about the plane’s lithium-ion batteries.
The Associated Press
Boeing shares lost $5.01, or 4.7 percent, to $101.87. At its peak, the selling knocked off $7.89 a share, or $6 billion of market value. The stock recovered slightly as speculation about the cause of the fire shifted away from the batteries.
The cause of the fire on the Ethiopian Airlines plane -- which broke out more than 8 hours after it had landed in London -- remained under investigation. The location of the fire led some experts to surmise it wasn't the planes lithium-ion batteries.
Meanwhile, an unspecified mechanical issue caused another 787 flown by Thomson Airways to return to Manchester Airport, adding to concerns about the plane.
Runways at Heathrow were shut down for nearly an hour as emergency crews put out the fire. No passengers were on the plane.
The 787, which Boeing dubs the Dreamliner, was grounded in January following two incidents with its lithium-ion batteries. One 787 caught fire shortly after it landed at Boston's Logan International Airport on Jan. 7.
Boeing marketed the plane to airlines as a revolutionary jet which -- thanks to its lightweight design -- burns 20 percent less fuel to comparable aircraft. Boeing, based in Chicago, has delivered 66 of the planes to customers with another 864 of them on order.
Boeing's stock partially rebounded after photos were circulated showing the section of the plane damaged by the fire, an area far away from the battery compartment.
The photos show the rear roof of the plane burned, near the jet's vertical stabilizer, often called the tail.
The batteries are located in two separate compartments under the floor of the plane. One is near the wings; the other under the cockpit. Friday's fire wasn't near either of those areas.
"Evidence thus far suggests that the battery was not the cause of the fire at Heathrow," Jason Gursky, an aerospace analyst with Citi told investors. "The images out of London are not consistent with the fire at Boston Logan, which prompted the grounding earlier this year."
He added that "aircraft are complex animals such that a fire could come from many places." He added that this incident could highlight a new problem with the 787, causing further problems for Boeing.
The unanswered questions kept the company's stock sharply lower throughout the afternoon. Friday's loss ultimately shaved $3.8 billion from Boeing's market capitalization.
Boeing spokesman Marc Birtel said in an email that the company had personnel on the ground at Heathrow and that the company "is working to fully understand and address" the situation.
The U.S. National Transportation Safety Board and the Federal Aviation Administration said Friday that they were sending representatives to London to assist British authorities with their investigation of the fire.
"The headline nature of these (events) has become far too routine," said aviation consultant Robert Mann. "The airplane has to start proving itself in service, doing what it was designed to do."
There were also few details about the severity of the Thomson Airways incident. The jet had taken off from Manchester, England headed to an airport in Sanford, Fla., near Orlando. The airline said it had returned to Manchester "as a precautionary measure." All 291 passengers disembarked safely and engineers inspected the aircraft, the airline said.
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