Report: Dreamliner Fire Not From GE Engine
After a Boeing (NYSE:BA) Dreamliner 787 caught fire in London’s Heathrow Airport Friday, observers were looking to assign the blame, while markets reacted negatively to all companies concerned. General Electric Co. (NYSE:GE) went on the record to say its engines were not responsible for the fire that broke out earlier on the Ethiopian Airlines jet.
Reuters reports that GE released a brief statement saying that it learned the fire did not originate in the GE Aviation engine that powers the Boeing Dreamliner plane. Saying it was “monitoring the situation” but wouldn’t comment further, GE spokespeople left the matter to authorities who are investigating on the ground in London. Boeing responded by saying company officials were looking into the cause of the fire.
The Ethiopian Airlines plane was empty, yet the fire was substantial enough to close Heathrow for approximately one hour on Friday evening, according to reports. Shares of GE, Boeing, Precision Castparts (NYSE:PCP) and Spirit AeroSystems (NYSE:SPR) all fell on Friday trading in New York. Boeing stock got the worst of it as news came in that a second Dreamliner — heading from Manchester, England to Florida — had to return to Britain due to technical problems.
Boeing dropped over five dollars, which amounted to nearly 5 percent. GE and Precision Castparts stock were both down around 1 percent, while Spirit AeroSystems lost over 2 percent on the day.
Following the grounding of the entire Dreamliner fleet due to lithium battery fires, these concerns were prominent as news of the Ethiopian Airlines fire broke. At the time of writing, there was no evidence linking Friday’s fire at Heathrow to lithium batteries on board the plane.
Boeing faced a public relations nightmare for several months following the grounding of the Dreamliner fleet, and recently celebrated the plane’s return to the skies. The drop in stock price, while a natural reaction, could be negated should the cause of the fire turn out to be crew-related. Citi analyst Jason Gursky wrote to investors on Friday about that likelihood.
“If the fire is related to a burned coffee pot or a mistake in the crew rest area, the stock should recover quickly to $106-$107,” Gursky wrote, according to AP sources. However, if the fire does turn out to be an issue with the plane, this event — plus the second Dreamliner incident of the day — could spell trouble for shareholders.