Delta's Refinery - hows that wroking out ?

[DUBLINFLYER]

I wonder what the ROI looks like now with oil at a $36/barrel and its projected to go lower, it was probably not Delta's greatest move.

 

[starcheck1]

http://www.fool.com/investing/general/2015/08/27/deltas-refinery-bet-is-finally-paying-off.aspx

 

[Tanker Clown]

The same guy who thought up the refinery idea thought up Song!

 

[bafanguy]

Any time an airline gets that far from its core business, it naturally raises eyebrows.

 

[Dornier 335]

We need Uncle Buckle to revive old GL threads about the refinery!

 

[freightdogfred]

I'd say it's safe to say RA is the savviest airline CEO out there. His track record is tough to beat, every move he's made has paid off big time for DAL. Last thing I read on the net is he's strong-arming Boeing for 10 used triple 7's for under 10 mil each. Sharp dude

 

[Muskycat]

I wonder what the ROI looks like now with oil at a $36/barrel and its projected to go lower, it was probably not Delta's greatest move.

This board is ********************ing dead................

 

[GlorifiedCabbie]

A refinery REFINES the oil. I know oil consumption is down, but the empty tankers were lined up down the river past Wilmington. Somebody is making money.

 

[Andy]

I'd say it's safe to say RA is the savviest airline CEO out there. His track record is tough to beat, every move he's made has paid off big time for DAL. Last thing I read on the net is he's strong-arming Boeing for 10 used triple 7's for under 10 mil each. Sharp dude

Here's an article disputing that $10M figure: http://247wallst.com/aerospace-defense/2015/10/26/how-much-does-a-used-boeing-777-cost/

A refinery REFINES the oil. I know oil consumption is down, but the empty tankers were lined up down the river past Wilmington. Somebody is making money.

The crack spread (a good measure of refinery profitability) has decreased quite a bit since summer. The refinery likely lost money this quarter and will probably lose money again in the first quarter unless there's a large change in the crack spread.

One metric to see how the refinery is working out is to look at fuel costs from the third quarter.
Delta: $1.80/gal
United: $1.87/gal
American: $1.67/gal
Southwest: $1.89/gal (they reported 3 numbers - 'unhedged' of $1.70, $1.89, and 'economic' of $2.29 - I don't know what goes into 'economic fuel costs')

American doesn't hedge fuel so if oil prices keep dropping, they will do the best of the majors.

It looks like Delta did fairly well in the third quarter, but they've had much higher numbers than others in previous quarters. First 9 months of 2015:
Delta: $2.35/gal
United: $2.01/gal
American: $1.80/gal
Southwest: $1.98/gal ('unhedged' of $1.85, $1.98, 'economic' of $2.08)

I'd also have to dig through Delta's numbers closer; they list $1.80 adjusted and $1.89/gal in 3Q.
Delta lists $2.35/gal adjusted and $1.95/gal for the first 9 months of 2015.


The clear 'winner' in the cost of fuel is American. As for everyone else, it all depends on what the accountants add into the cost of fuel.

One thing about Delta's refinery is that it's tuned to produce a much higher percentage of jet fuel than a 'normal' refinery. The larger supply of jet fuel helps lower the fuel costs for all airlines on the east coast. The lower jet fuel cost due to Delta's refinery is not something that can be easily quantified.

 

[Freebrd]

This board is ********************ing dead................

So why are you here, hmmm? So you can tell us it's dead? Rich.

 

[Uncle Bunkle]

So why are you here, hmmm? So you can tell us it's dead? Rich.

Although I do like that name: Muskycat.
Certain ring to it.

 

[Freebrd]

Although I do like that name: Muskycat.
Certain ring to it.

Yeah reminds me of a FA I did once.....ewwwwwwww stinky!

 

[maru657]

The delta pilots are asking for a 40% pay increase. Wonder how many will support the Aryan Brotherhood?

 

[Freebrd]

RA and gang enriching the management team, stole pilot's pension and cut their pay 40-50%, all other employees got 15% pay increase, buying back stock to increase management's take, so it's time. FUPM!

not a DAL pilot but support them getting what they deserve :beer:

 

[General Lee]

"A great market for refiners

Delta's strong refinery profitability has continued into 2015, helping to offset some bad fuel hedging bets in the first half of the year. In Q1, the refinery earned $86 million. In Q2, it earned $90 million. This puts Delta on pace to exceed its initial target of $300 million in annual refinery earnings this year.

Moreover, conditions in the refinery industry have been getting better every day. The combination of cheap oil and solid demand for gasoline in the U.S. has driven up refining margins here. A few major unplanned outages have created shortages of refined products in certain regions, adding to refiners' windfalls."


Bye Bye---General Lee

 

[Uncle Bunkle]

Genny Cream Ale with a triumphant return!

 

[Freebrd]

Genny Cream Ale with a triumphant return!

She's loose again!

 

[redflyer65]

How's it going?

It's not.

Delta Air Lines Bought an Oil Refinery. It Didn’t Go as Planned. (Published 2020)

Delta’s foray into oil refining illustrates some of the reasons the business was in trouble even before the pandemic.

www.nytimes.com