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Delta interested in buying an oil refinery?

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On Your Six

Well-known member
Joined
Mar 8, 2004
Posts
4,507
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
 
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...
 
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.
 
redflyer65 said:
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.
Click to expand...

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
 
Last edited:
FlyinGuy said:
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...
Click to expand...

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
 
Last edited:
On Your Six said:
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
Click to expand...

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.
 
On Your Six said:
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.
Click to expand...

Uh...wake up OYSter...alarm clock calling...time to wake up and go to work...:)
 
How much difference is there between diesel fuel and Jet-A?
 
The Prussian said:
Uh...wake up OYSter...alarm clock calling...time to wake up and go to work...:)
Click to expand...

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
 
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redflyer65 said:
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.
Click to expand...

Can't you see, this is exactly why an airline would do it! It doesn't make sense and will lose money!
 
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
 
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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.
 
redflyer65 said:
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
Click to expand...

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.
 
redflyer65 said:
Heavy crude oil vs. light sweet crude. Big difference.
Click to expand...

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.
 
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.
 
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.
 
fam62c said:
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.
Click to expand...

They made an investment that prevents us from losing feed in a quick, uncontrolled manner, while simultaneously taking feed away from our largest competitor. I'd prefer that we just pick up the flying ourselves, but it was probably a good move, considering the other options immediately available.
 
redflyer65 said:
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
Click to expand...

There are 4 interested parties. One airline, 3 oil companies, according to that article.


Godspeed!


The OYSter
 
nwaf16dude said:
They made an investment that prevents us from losing feed in a quick, uncontrolled manner, while simultaneously taking feed away from our largest competitor. I'd prefer that we just pick up the flying ourselves, but it was probably a good move, considering the other options immediately available.
Click to expand...


If you think that is a good move, just wait till delta farms out the DC -9 and airbus flying .

You will really think that's a good move.
 
B6Busdriver said:
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.
Click to expand...

In my experience you can run Jet A in a diesel engine however expect problems with seals if running a traditional type injection pump. Not sure how a common rail system will deal with it but I will guess better than the old style pumps. Jet A has a less oil in it and is a key lubricant in the pumps. I have seen it done but the smart folks added Murphy's mystery oil to the jet A to give some lubrication properties for the seals and o rings. As for diesel in a jet engine it does not run well, but will run. Higher EGT's and smutted up compressor section. When I was in the Army saw it happen on a AH-1 which was mis fueled at the POL site. We had to change the engine and flush all fuel lines. I am sure if it was truly interchangeable it would be common practice.
 
Just saw it on CNBC too. The commentators on there said they thought it was smart, and called it a possible "game changer.". But, Redflyer says "don't do it!". I always wondered what John Ross Ewing (JR Ewing's son) did after he grew up at South Fork, and it now appears he might be flying Orange and Blue 737-300s over Western Texas.


Godspeed!


The OYSter
 
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I never said not to do it, but usually the others are right about a company getting outside of their core business. Maybe they should go for it.

This a different refinery than the Philly Sunoco one.

PS..I'll fly a 300 around West Texas all day, everday if it makes money. Now that's simple.
 
Just saw the latest CNBC piece. Said Delta would have to sink 90 million into it so it can be up to code....and thats every four years.

Looks like they might be looking for a way to spend OYS's payraise she was counting on. Ooops!
 
redflyer65 said:
Just saw the latest CNBC piece. Said Delta would have to sink 90 million into it so it can be up to code....and thats every four years.

Looks like they might be looking for a way to spend OYS's payraise she was counting on. Ooops!
Click to expand...

But DL is making billions when you guys are making millions. And, if it saves more than $90 million over 4 years, could it be worth it? You bet Shirley! Enjoy the high pay over Western Texas while you can.


Godspeed!


The OYSter
 

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