Alaska or United?

[General Lee]

So are you saying DAL has UAL's best interests at heart?

No, I think the refinery helped everyone, and I don't know if DL did that on purpose. Probably not. But, the majority of DL's flights on the East Coast were helped, and that was the point.



Bye Bye---General Lee

 

[RNP.15]

You sound like you have lots of love


Your kids are lucky to have you as a parent .


I bet you could write a great children's book.

You missed the point. "Sarcasm" I think both AK and SWA are great places to work.

 

[slaquer5]

You missed the point. "Sarcasm" I think both AK and SWA are great places to work.

Sorry brother

 

[SWA Bubba]

You missed the point. "Sarcasm" I think both AK and SWA are great places to work.

Still, don't write that kids' book. Sarcasm is almost always wasted on little kids--they don't get it, they start crying, and then you're buying ice cream and apologizing over and over to their mother. :0

Bubba

 

[SIG600]

Well I think DL buying the refinery has helped ALL airlines on the East Coast, not just DL.


Bye Bye---General Lee

If buying the refinery has been such a windfall, why hasn't anyone followed suit? It's not like finding one for sale is hard.

 

[General Lee]

If buying the refinery has been such a windfall, why hasn't anyone followed suit? It's not like finding one for sale is hard.

Looks like they don't have to on the East Coast because EVERYONE seems to be benefiting. The "middle man" was taken out of the equation. The people who so far don't agree with the purchase are people in the refining business, and some "J.R. Ewing" wannabes on this forum. Most of the analysts out there may have been skeptical at first, but have probably come around. RA tried to figure out how to lower his number one cost when oil was high, and he did just that, and was thinking out of the box at the same time. That is what makes him different than other airline CEOs.



Bye Bye---General Lee

 

[Andy]

If buying the refinery has been such a windfall, why hasn't anyone followed suit? It's not like finding one for sale is hard.

I haven't shopped for refineries, so I can't speak on the issue of whether or not they're easy to find on sale.

There were a number of jet fuel supply issues on the east coast that were causing east coast jet fuel prices to be higher than most of the rest of the US.

Starting with refinery production, refineries produce a number of different fuels to optimize profit. Refineries' percentage of Jet fuel production vs gasoline/diesel/heating oil/etc has been causing a shortage of jet fuel, driving up prices. And since most jet fuel consumed on the east coast was produced in the gulf coast, there were transport costs and pipeline limitations (supply constraints) that also raised costs.

Another reason for jet fuel prices to rise on the east coast, and was part of the reason why east coast refineries were being shut down is that the Amsterdam/Rotterdam/Antwerp (ARA) refineries, optimizing their refineries, were overproducing gasoline for Europe. This is because there's been a shift toward diesel vehicles in Europe, decreasing the need for gasoline. A lot of the excess refined gasoline has been exported to the east coast of the US. I'd dig up links to show the numbers, but this one should satisfy anyone scratching their cranium case about gasoline exports/imports: http://blog.pjk-international.com/?type=91&PaginaID=616&CatID=327&SubID=317&Letter=1&ADID=119


At this point, I'd like to make sure that everyone understands that Delta's refinery purchase was/is a hedge on the crack spread, not on jet fuel prices. Delta still needs to buy oil and refine it so it doesn't lower their cost of purchasing oil.

That said, one thing that Delta did which is IMHO brilliant is that they've tweaked the refinery to produce a higher percentage of jet fuel than other refined products. Delta swaps a lot of the other refined products for jet fuel.

Because of the increased supply of jet fuel on the east coast due to Delta's refinery, it has driven down the east coast cost of jet fuel for all airlines. I'm sure it wasn't their intention, but since they are probably the largest consumer of jet fuel on the east coast, Delta benefits the most from the refinery.

 

[SIG600]

http://www.delcotimes.com/business/...r-refinery-but-finds-challenges-getting-crude


But....

http://www.businessinsider.com.au/delta-airlines-fuel-prices-2014-8

So thanks.

 

[Andy]

Sig, thanks for the links; pretty much confirms what I've written on the subject for quite a while. I think one of my older posts even discussed the need for a pipeline from Trainer to the nearest pipeline that could move crude from the Clearbrook, MN terminal.

Delta's contracts for Bakken crude have been great for them because the Trainer refinery is old and can't process heavier crude oils. Bakken is high quality crude which Delta's been getting at a pretty hefty discount due to transportation (pipeline) issues - this oil would be much more expensive if it were easy to move by pipeline. I find it ironic that the government discusses the hazards of transporting this crude via pipeline when they allow it to be transported by rail, which is a lot less safe than pipeline transport.
But 'ol Warren B. owns the rails so I suppose this is the administration's kickback for his support and campaign contributions.

 

[SIG600]

I find it ironic that the government discusses the hazards of transporting this crude via pipeline when they allow it to be transported by rail, which is a lot less safe than pipeline transport.
But 'ol Warren B. owns the rails so I suppose this is the administration's kickback for his support and campaign contributions.

There you go. Same reason Warren B has opposed the Keyston XL.