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787 fire: Investigators focus on key component

Three days after a fire aboard an Ethiopian Airways 787 Dreamliner, investigators are focusing on what role the plane's emergency locating transmitter (ELT) may have played in the fire.

The ELT is a component on all commercial airplanes that sends out a signal during a crash to alert rescue crews on the location of the plane. It is always hooked up to a battery. Now investigators are trying to determine what role, if any, the Dreamliner's ELT played in Friday's fire.

Honeywell, which makes the ELT in the Dreamliner, said it is working with investigators in the United Kingdom.

Steve Brecken, director, global media and analyst relations, issued a statement to CNBC: "As is common in these situations, Honeywell has been invited to participate in the Ethiopian Airlines Boeing 787 fire investigation by the UK's Air Accidents Investigation Branch. We've sent technical experts to Heathrow to assist with the investigation, however at this time it is premature to speculate on the cause of the fire. We will continue to work closely with Boeing and the NTSB and await the analysis and output of the investigation before drawing any conclusions."

Brecken says Honeywell ELT products have been certified by the FAA since 2005 and are used in a number of different aircraft models. The company says it has never had a single reported issue with the product-line.

Sources familiar with the investigation said it is still too soon to pinpoint a cause for the Dreamliner fire.

(Read more: Despite fire, airlines flying Boeing's Dreamliner)

Boeing shares rally

As investigators move along with their probe, investors seem to be increasingly confident this fire will not lead to major setbacks for the Dreamliner or Boeing. Throughout the day on Monday, BA shares ticked higher, gradually recovering most of the ground the stock lost when the fire was first reported.

Over the weekend, investigators ruled out the 787's lithium-ion battery system having a direct link to the fire. If the cause is ultimately determined to be due to a one-time fault and is not indicative of a broader manufacturing defect, many believe the damage to Boeing is limited.

Boeing and the 13 airlines that fly the 787 are not parking their planes while investigators in Britain search for the cause of the fire.

Why?

The answer is that Boeing and its customers have not seen enough evidence to suggest this type of fire could happen on other Dreamliners.

(Read More: Dreamliner flying again in US after lengthy grounding)

Plane fires are rare

UBS analyst David Strauss said that by his count there have been 25 ground fire incidents over the past 50 years. So these types of fires on planes are extremely rare.

Also, given the increased use of flame retardant materials in airplanes it raises questions about what could have sparked the fire in the crown of the plane.

Is it possible something went wrong with the wiring or with one of the components in the Dreamliner's electronics? Sure. But even that possibility isn't enough to spook airlines into parking their 787 fleets.

There's a distinct possibility that the cause of Friday's fire was a faulty component or the incorrect installation of some component in that part of the Ethiopian Airways plane. Either of those possibilities, while certainly not good, would also present Boeing with a problem it could easily check on the 68 Dreamliners flying around the world.

That's the reason Boeing and its customers are taking a cautious wait-and-see approach.

Growing pains for new planes

The immediate fallout from the fire on the tarmac at Heathrow Airport swirls around headline risk hitting Boeing shares. Anytime a Dreamliner doesn't take off as scheduled or cuts a flight short there is a predictable flurry of tweets and headlines saying "more problems for Boeing."

These are the growing pains that come with a new plane introducing new technology. Following the grounding of the 787 because of problems with the lithium-ion battery systems, investors were just starting to get past the headline risk the Dreamliner poses to shares of BA.

(Read more: Boeing's shares reel on Heathrow fire, drag Dow with it)

In fact, on Friday morning, Boeing stock had risen to a new all-time high and fewer investors were worried about the Dreamliner. All that changed with this recent fire which knocked $3.8 billion off the company's market cap in the minutes after the first report.

The headline risk of the 787 is once again in play for Boeing investors.

As for Boeing customers they're taking a wait-and-see approach.

By CNBC's Phil LeBeau. Follow him on Twitter: @Lebeaucarnews