Delta interested in buying an oil refinery?

[On Your Six]

Yep, according to an article I just read, they are one of four interested potential buyers in the Sunoco Refinery in Philadelphia. If it happens, the airline would use it to bring down fuel costs in the NE. Lots of rumors floating around too besides the 717 rumor, like having a new contract to vote on by the end of next month, even though the current one isn't really ammendable until the end of December this year. Crazy times. I wonder what the rush is? Looks like DL had a great March too, with PRASM up 13% yoy from last year.



Godspeed!


The OYSter

 

[FlyinGuy]

Just because they own an oil refinery does not mean they can bring down fuel prices!!! It means they can refine oil and sell it...

 

[redflyer65]

OYS,

You need to do a little more research. This old Sunoco refinery was only for heavy crude. The problem is their is no heavy crude close to Philly. It operated at a loss for years. It's a diesel refinery. Unless Delta has plans to either convert it (probably not even possible), or change their planes over to 'diesel only'. I see it as laughable.

But I'm sure the EPA would be quick to sign off on any good plan with Lisa Jackson at the helm.

 

[On Your Six]

OYS,

You need to do a little more research. This old Sunoco refinery was only for heavy crude. The problem is their is no heavy crude close to Philly. It operated at a loss for years. It's a diesel refinery. Unless Delta has plans to either convert it (probably not even possible), or change their planes over to 'diesel only'. I see it as laughable.

But I'm sure the EPA would be quick to sign off on any good plan with Lisa Jackson at the helm.

Look it up on Google, I can't post it now for some reason. Obviously they would have a reason to buy it if it happens. I have a feeling they know more about it than you do.


The other rumor floating around is that Airbus came in with a good deal to offer low priced A319s(maybe recently parked from European BKs?) to the airline instead of your 717s. No idea if that is true or not, but if it is and it goes through, that could mean you are stuck with a plane your CEO publically stated he doesn't want. It might be expensive to off load those, and GK even said he might have to park them and still pay for them if he can't find a new buyer.


Godspeed!


The OYSter

 

[On Your Six]

Just because they own an oil refinery does not mean they can bring down fuel prices!!! It means they can refine oil and sell it...

That is not what the article stated, but I can't seem to paste it right now. It's on Google. But thanks for the oil lesson Bobby Ewing.


Godspeed!


The OYSter

 

[8sugarsugar]

Look it up on Google, I can't post it now for some reason. Obviously they would have a reason to buy it if it happens. I have a feeling they know more about it than you do.

The other rumor floating around is that Airbus came in with a good deal to offer low priced A319s to the airline instead of your 717s. No idea if that is true or not, but if it is and it goes through, that could mean you are stuck with a plane your CEO publically stated he doesn't want. It might be expensive to off load those, and GK even said he might have to park them and still pay for them if he can't find a new buyer.


Godspeed!


The OYSter

Investing in oil services sector might be a smart hedge. kudos to delta to diversify. the UAE and Emirates are a nice compliment. Fuel price goes up, UAE makes more, EK makes less, and vice versa.

Emirates is something like 25% the GDP of the UAE.

 

[The Prussian]

The other rumor floating around is that Airbus came in with a good deal to offer low priced A319s(maybe recently parked from European BKs?) to the airline instead of your 717s. No idea if that is true or not, but if it is and it goes through, that could mean you are stuck with a plane your CEO publically stated he doesn't want. It might be expensive to off load those, and GK even said he might have to park them and still pay for them if he can't find a new buyer.

Uh...wake up OYSter...alarm clock calling...time to wake up and go to work...

 

[JimNtexas]

How much difference is there between diesel fuel and Jet-A?

 

[redflyer65]

How much difference is there between diesel fuel and Jet-A?

Heavy crude oil vs. light sweet crude. Big difference.

 

[Ky.BrownBourbn]

It operated at a loss for years.

Sounds like their airline operation!

Oh yeah, things are good now but there's always someone wanting to diversify the business! Stick to what you do best (or not!)

Later,
KBB

 

[On Your Six]

Uh...wake up OYSter...alarm clock calling...time to wake up and go to work...

Sorry, GK was quoted in an article stating exactly that, if he couldn't find a buyer, he'd fly the 717s, or he'd park them and still pay until the leases are up. Now, maybe there are negotiations underway, but the delay might mean terms are getting better for one side. Then, the possibility of another fleet type comes in, and dashes hopes. Great drama. Have a good one.


Godspeed!


The OYSter

 

[kf4amu]

OYS,

You need to do a little more research. This old Sunoco refinery was only for heavy crude. The problem is their is no heavy crude close to Philly. It operated at a loss for years.

Can't you see, this is exactly why an airline would do it! It doesn't make sense and will lose money!

 

[On Your Six]

Can't you see, this is exactly why an airline would do it! It doesn't make sense and will lose money!

Maybe the airline should hire you and Redflyer as oil consultants?


Godspeed!


The OYSter

 

[Lampshade]

Heavy crude oil vs. light sweet crude. Big difference.

Do you even know what you're talking about?

 

[redflyer65]

Yes I do. My family has been in the industry for a long time. The Philly plant didn't have access to the oil they needed. I did have it backward...they are set up only for light sweet crude. But there is none close by.

Transporting the crude in was way too expensive. Had to tanker it in..

Here's a big red flag for you..

When other refineries aren't even interesed, there is a major, major problem with the operation. That's all you really need know.
.
RF

 

[Flash]

Sir Richard was talking last year about buying his own refinery but I haven't seen anything since. Maybe he realized that if the oil company doesn't want to do it than it is a money loser , which would make it perfect for a major US airline as they can just declare bankruptcy, I think they're all used to that trick.

 

[8sugarsugar]

Here's a big red flag for you..

When other refineries aren't even interesed, there is a major, major problem with the operation. That's all you really need know.
.
RF

Exactly why an airline might be interested in buying, because if airline executives were smart they would be working for Goldman Sachs, but they aren't.

 

[B6Busdriver]

Heavy crude oil vs. light sweet crude. Big difference.

I've seen JetA run interchangeable with diesel in large over the road trucks. FedEx did it years ago at a particular station. The only reason they stopped was the concern about failing to pay taxes that one pays at the pump.

 

[redflyer65]

True. Anything can be done...but at what cost? Especially with the higher cost of just transporting the product. Sunoco used to brag about that plant years ago but the cost finally caught up to them. The location killed them in the end.

 

[fam62c]

Airlines have a bad track record when it comes to investing in non-core businesses, even travel related businesses like hotels and rental car companies. DAL just made an investment in Pinnacle to keep those RJ's flying, that's not a rumor.