Thursday, October 15, 2015

Snickers met Delta's refinery purchase. Who laughs today?

Discounted jet fuel from Delta's Trainer, Pa. refinery supplies the airline's Northeast operations. Matt Rourke/AP
What in the world does an airline know about running an oil refinery?

That was the reaction of many energy and financial 'experts' when Delta Airlines announced in 2012 that it had bought the former ConocoPhillips refinery outside of Philadelphia in Trainer, Pa. for $150 million to reduce their fleet's jet fuel costs.

No snickering today. Linda Loyd reports why in the Philadelphia Inquirer:
Delta Air Lines said Wednesday that its Trainer refinery in Delaware County posted an $86 million profit in the first quarter of this year.
Delta said the sharp drop in crude oil prices would translate into a $2.2 billion savings in jet-fuel costs in 2015.
"Over the last four quarters, the refinery has produced a cumulative profit of over $220 million," chief financial officer Paul Jacobson said during a conference call on the  company's earnings.
Delta, whose report began airlines' earnings season, said it expected that the refinery would make about $80 million in the second quarter.

Read the full story here

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