July 13, 2013 in Business

Fire, glitch strike two 787s

Incidents prompt drop in stock of Boeing, suppliers
Jim Jelter McClatchy-Tribune
 

Two mishaps Friday with Boeing 787 Dreamliners sent the aerospace company’s shares sharply lower on concerns the troubled aircraft might again be grounded.

Fire broke out Friday on an Ethiopian Airlines Boeing 787 at London’s Heathrow Airport, prompting a temporary shutdown of the airport’s runways as firefighters rushed to the stricken aircraft.

Boeing said it is aware of the fire at Heathrow and tweeted: “We’re working to fully understand and address this.”

Soon after, charter carrier Thomson Airways reported an unspecified technical problem on one of its 787s forced the plane to abandon its flight to Florida from Manchester, England.

The good news? Initial reports indicate the Ethiopian Airlines aircraft was empty and parked at a remote corner of Heathrow at the time the fire broke out.

Meanwhile, the diverted Thomson flight made it safely back to Manchester.

But none of this was good news for Boeing’s share price, which tumbled as much as 6 percent, a move that weighed on an already weakened Dow Jones industrial average, which includes Boeing among its 30 listed companies.

Boeing shares ended more than 4.5 percent lower at $101.87. The move knocked about $3.8 billion out of Boeing’s market capitalization.

The fire aboard the Ethiopian Airlines airplane was the first mishap for Boeing’s troubled 787 Dreamliner since U.S. aviation authorities seven weeks ago cleared the aircraft to resume service following minor fires in January aboard two Japanese-owned 787s. The fires were traced to overheated lithium-ion battery packs.

Boeing engineers claimed to have found a remedy for the problem and have been retrofitting 787s with upgraded battery systems.

There was collateral damage from the latest incidents in the market, however. Shares of several key Boeing 787 suppliers were also down on the news, including Precision Castparts Corp., whose shares fell as much as 7 percent on the news.

Spirit Aerosystems Holdings Inc. shares dropped 2 percent on the news while Hexcel Corp. shares were off 0.4 percent.

Spirit Aerosystems makes several of the 787’s main components, including the leading edge of the plane’s wings and its nose section.

Hexcel provides Boeing with lightweight composite materials used in the 787, a key factor behind the plane’s fuel efficiency.

The 787, touting fuel efficiency and cutting edge technology, is the best-selling commercial aircraft ever. Since September 2011, Boeing has delivered about 66 to airlines around the world and has orders on its books for another 864.

While the 787 program has been beset by production problems, delivery delays and safety concerns, order cancellations have been relatively few.

United Continental is so far the only U.S. carrier flying 787s.

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