bobnwa
Topic Author
Posts: 4486
Joined: Fri Dec 22, 2000 12:10 am

How is the Delta Refinery Doing?

Fri Sep 13, 2013 4:13 pm

Can any of the insiders at Delta bring me up date regarding the oil refinery it bought .
Is it up and operating?
Is it profitabel for Delta?
Is it saving Delta money on fuel purchases?

I have not seen an update for many months.
 
Rdh3e
Posts: 2883
Joined: Wed Mar 30, 2011 2:09 pm

How is the Delta Refinery Doing?

Fri Sep 13, 2013 4:21 pm

Quoting bobnwa (Thread starter):
I have not seen an update for many months.

They provide an update with their quarterly results. As of last quarter it was up and running, but losing money.

As of 2Q13: http://www.delta.com/content/dam/del...-financial/JuneQuarterNonGAAPs.pdf

It says Trainer cost them $51M, increasing their fuel costs about 5 cents per gallon.

[Edited 2013-09-13 09:24:06]
 
stxbohn
Posts: 85
Joined: Sun Apr 01, 2007 1:44 am

How is the Delta Refinery Doing?

Fri Sep 13, 2013 5:19 pm

Very much up and running providing hydrocarbon products to the northeast out of more and more crude by train from domestic production.
 
bobnwa
Topic Author
Posts: 4486
Joined: Fri Dec 22, 2000 12:10 am

RE: How Is The Delta Refinery Doing?

Fri Sep 13, 2013 8:56 pm

Quoting stxbohn (Reply 2):
Very much up and running providing hydrocarbon products to the northeast out of more and more crude by train from domestic production.

Is it profitable for Delta? That is the important question.
 
mcg
Posts: 754
Joined: Tue Sep 16, 2003 11:49 am

RE: How Is The Delta Refinery Doing?

Fri Sep 13, 2013 9:30 pm

The refinery has not been profitable for DL.
 
Alnicocunife
Posts: 195
Joined: Sat Mar 26, 2011 3:32 pm

RE: How Is The Delta Refinery Doing?

Fri Sep 13, 2013 9:52 pm

Quoting mcg (Reply 4):
The refinery has not been profitable for DL.

But Delta has been profitable from the refinery. Because it has fuel buying power it has more leverage to purchase fuel at a lower cost. Not just refined fuel from Trainer but almost everywhere in the USA.
 
canoecarrier
Posts: 2569
Joined: Sat Feb 14, 2004 1:20 pm

RE: How Is The Delta Refinery Doing?

Fri Sep 13, 2013 10:02 pm

Quoting Alnicocunife (Reply 5):
But Delta has been profitable from the refinery. Because it has fuel buying power it has more leverage to purchase fuel at a lower cost.

Are you saying they have more raw crude buying power because of the purchase of the refinery? Or, that they can purchase finished product at a discount now due to the negotiating power they have after purchase of the refinery?
The beatings will continue until morale improves
 
wjcandee
Posts: 5340
Joined: Mon Jun 05, 2000 12:50 am

RE: How Is The Delta Refinery Doing?

Fri Sep 13, 2013 10:25 pm

The economics of the refinery are complicated. Operating it may have cost $51 million over income from it, but that's not the whole story.

First, it provides competition against what was an oligopoly of refiners. By refusing to tacitly-collude with them on both the volume of Jet-A made from a barrel of crude, and by lowering the crack spread on Jet-A, Delta helps itself in ways not measurable as precisely as one might think. Also, by switching feedstock to Baaken crude, the refinery may have plugged into a great long-term source of lower-priced crude.

It's like adding Airtran (pre-WN) to the market. The three carriers in there were technically-competing, but nobody was rocking the boat on fares. Enter Airtran, and overall fares declined as real competition entered. Same thing in some sense with this refinery. It's an asset with great potential that they will tweak and tweak and tweak, and I have no doubt they will figure it out.

I think this quotation from the article cited below really says it all: "According to Reuters data, at the start of 2012, physical jet fuel in the New York Harbor was trading at a $9 premium to ultra low sulfur diesel. In recent weeks, jet dropped to a $16.25 discount to diesel." With the refinery's output in the marketplace, there was a $25 swing in the price of Jet A relative to (similar) low-sulfur diesel fuel in NY Harbor. http://www.reuters.com/article/2013/...lta-refinery-idUSL2N0E31ZX20130523







[Edited 2013-09-13 15:25:39]

[Edited 2013-09-13 15:33:20]

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos