The Register points to a press release (PDF) from Australian airline Regional Express describing an incident last Friday in which an iPhone experienced "self combustion" onboard an aircraft just after the flight landed in Sydney. Based on an accompanying photo of the damaged iPhone, the device appears to be an iPhone 4.
Regional Express (Rex) flight ZL319 operating from Lismore to Sydney today had an occurrence after landing, when a passenger’s mobile phone started emitting a significant amount of dense smoke, accompanied by a red glow.
In accordance with company standard safety procedures, the Flight Attendant carried out recovery actions immediately and the red glow was extinguished successfully.
A photo of the device shows a shattered rear glass panel and an apparent burn or scorch mark in the area corresponding to the lower half of the device's battery.
The press release offers no additional information on the circumstances surrounding the incident, such as whether the passenger was attempting to use the device at the time, but the iPhone has been turned over to the Australian Transport Safety Bureau for investigation.
iPhone-related combustion is not an unheard-of phenomenon, although most reported incidents appear to have involved charging issues. This incident's occurrence on an airplane does, however, obviously draw some attention to the dangers of any potential combustion sources in such settings and will no doubt be thoroughly investigated in an attempt to determine its root cause.
