KarlB737 From United States of America, joined Mar 2004, 2925 posts, RR: 9 Posted (10 months 4 weeks 1 day 7 hours ago) and read 1925 times:
OK, we saw in April that Delta was going to pursue this refinery. Now they have closed on the deal. My question is this: Assuming that fuel cost savings are indeed significant do you think they might pass on those savings to labor or the flier's cost of a ticket even to the extent of undercutting a competing airline's price on a route?
Courtesy: Associated Press Via Pittsburgh Post-Gazette
Delta Closes On Deal For Philly-Area Refinery
"A Delta Air Lines subsidiary closed Friday on a deal to purchase a suburban Philadelphia oil refinery and plans to resume fuel production in the fall, a move the airline hopes can cut its jet fuel bill by $300 million a year."
"Officials said the refinery is expected to restart in September and that a Delta subsidiary - Monroe Energy LLC - will run it. Monroe will start a turnaround at Trainer after the July 4 holiday and plans to resume fuel production in the fall, company officials said in a statement."
HarleyDriver From United States of America, joined exactly 3 years ago today! , 71 posts, RR: 0 Reply 1, posted (10 months 4 weeks 1 day 3 hours ago) and read 1645 times:
As nice as it would be to see the money passed on to the employees or to lower the price of tickets, my assumption is that isn't what will happen. If the profits from this acquisition are indeed substantial the money will probably be used to lower company debt and build up their coffers and of course increase shareholder value. As nice as it would be to see the money go where we would like to see it go, Delta is a business and shareholder value is one of the top goals of a publicly traded company. If it goes into the bank accounts of high level executives then I hope the employees can see a benefit to this too.
B757forever From United States of America, joined May 2010, 249 posts, RR: 2 Reply 3, posted (10 months 4 weeks 1 day 2 hours ago) and read 1539 times:
Quoting KarlB737 (Thread starter): Assuming that fuel cost savings are indeed significant do you think they might pass on those savings to labor or the flier's cost of a ticket even to the extent of undercutting a competing airline's price on a route?
DL spends 12 Billion a year on Jet A, or about 38 million per day. Savings from the refinery is expected to be 300 million. I saw elsewhere that it equated to approx 3 dollars per ticket sold if averaged across all tickets. I cannot see where this would give any huge advantage in undercutting your competition, it would be nice to add to the bottom line, it would be better if shared with the employees.
deltaguy767 From United States of America, joined Jun 2005, 633 posts, RR: 2 Reply 4, posted (10 months 4 weeks 1 day ago) and read 1366 times:
I was under the impression that DL issues profit sharing checks to employees in February so long as the previous year ended with the company in the black. So, if the oil refinery allows DL to increase its profits, then by simple arithmetic the employees will see their profit sharing checks increase. Time will tell if this is a winner for DL, hopefully JPM's analysis is sound.
B757forever From United States of America, joined May 2010, 249 posts, RR: 2 Reply 5, posted (10 months 4 weeks 1 day ago) and read 1293 times:
Quoting deltaguy767 (Reply 4): I was under the impression that DL issues profit sharing checks to employees in February so long as the previous year ended with the company in the black.
Very true. Perhaps I should have said "it would be better when shared with the employees"
FlyASAGuy2005 From United States of America, joined Sep 2007, 6505 posts, RR: 11 Reply 6, posted (10 months 4 weeks 23 hours ago) and read 1220 times:
Quoting rwy04lga (Reply 2): We're getting a raise on July 1 and another on Jan 1. We were only expecting one of them (I forget which one).
The July 1st raise was announced in December. The Jan 1 '12 raise was only announced several weeks ago. A product of the yearly employee survey. Most (incuding myself) said that we would rather have more money in their pocket on a monthly basis vs. betting on the swing of profits. So the profit sharing formula will change for CY 2013. The check we will be getting on this coming Valentine's Day will remain unchanged.
Quoting deltaguy767 (Reply 4): I was under the impression that DL issues profit sharing checks to employees in February so long as the previous year ended with the company in the black. So, if the oil refinery allows DL to increase its profits, then by simple arithmetic the employees will see their profit sharing checks increase. Time will tell if this is a winner for DL, hopefully JPM's analysis is sound.
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