KarlB737
Topic Author
Posts: 2635
Joined: Sat Mar 20, 2004 9:51 pm

Delta Closes On Deal For Philly-Area Refinery

Sat Jun 23, 2012 6:57 pm

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."

http://hosted.ap.org/dynamic/stories...&SECTION=BUSINESS&TEMPLATE=DEFAULT
 
harleydriver
Posts: 63
Joined: Tue May 18, 2010 1:09 pm

RE: Delta Closes On Deal For Philly-Area Refinery

Sat Jun 23, 2012 10:53 pm

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.
Department of Redundancy Department
 
rwy04lga
Posts: 1976
Joined: Mon Jul 18, 2005 7:21 am

RE: Delta Closes On Deal For Philly-Area Refinery

Sat Jun 23, 2012 10:56 pm

We're getting a raise on July 1 and another on Jan 1. We were only expecting one of them (I forget which one).
Just accept that some days, you're the pigeon, and other days the statue
 
B757Forever
Posts: 674
Joined: Tue May 04, 2010 3:23 am

RE: Delta Closes On Deal For Philly-Area Refinery

Sat Jun 23, 2012 11:38 pm

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.  
The Rolls Royce Dart. Noise = Shaft Horsepower.
 
deltaguy767
Posts: 639
Joined: Tue Jun 14, 2005 8:32 am

RE: Delta Closes On Deal For Philly-Area Refinery

Sun Jun 24, 2012 1:36 am

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.
A Good Landing is one you walk away from!
 
B757Forever
Posts: 674
Joined: Tue May 04, 2010 3:23 am

RE: Delta Closes On Deal For Philly-Area Refinery

Sun Jun 24, 2012 1:58 am

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"  
The Rolls Royce Dart. Noise = Shaft Horsepower.
 
FlyASAGuy2005
Posts: 3965
Joined: Sun Sep 23, 2007 4:55 am

RE: Delta Closes On Deal For Philly-Area Refinery

Sun Jun 24, 2012 2:29 am

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.
What gets measured gets done.