Well, they did once didn't they? I have vague memories of high school history teachers droning on about the "trusts" and the "trust busters". Didn't one of the car manufacturers have oil, rubber, steel, etc. companies under it's umbrella? Maybe that was standard oil I'm thinking of. I can't recall high school course work all that well. I was a bit pre-occupied with...well...other things.
Standard Oil. http://en.wikipedia.org/wiki/Standard_Oil
Correct me if I am wrong, but doesn't Delta owning a refinery help the rest of the industry as well? If they can reduce the crack spreads and lower their fuel costs, wouldn't that put pressure on the competing fuel companies who supply United, American, SWA, etc to lower their pricing or become a little more competitive? If so, I see it as a win win for the other carriers without the overhead.
Some jerk wrote this back in June:
Delta's Trainer refinery has been a success in reducing the JetA crack spread. A 'normal' refinery produces ~9% JetA as its final product. Delta was looking for mid-30s JetA for its final product; I've read it's 'only' running in the high 20s. Frankly, that's a huge success in reducing JetA crack spreads. The much higher percentage of JetA production vs other oil based products cannot be understated. This is a huge benefit for all airlines.
The problem with Delta being the only airline with a refinery is that all airlines (especially those that have large presence in the vicinity of Trainer - JetBlue, Yonited, US Scareways, American) benefit from the reduced crack spread. So to measure Trainer's performance by traditional profit/loss metrics is a bit flawed.
Bottom line: on paper, Trainer may appear to be a money loser, but the reduction of JetA crack spread will likely make it a moneymaker for Delta. For the rest of the airlines, they will freeride off of Delta's refinery investment.
A lot of the northeastern refineries have been closing due to refined gasoline being shipped from Europe. There has been a shift in European vehicles from gasoline to diesel, and as a result their refineries produce excess auto gasoline - that gasoline gets shipped to the east coast. But they're not shipping jet fuel to the east coast. As a result, there was less jet fuel produced on the east coast, driving up jet fuel crack spreads. With Trainer being tweaked to produce a much higher percentage of refined product as jet fuel, the jet fuel crack spread has dropped considerably.
They make profit off the crack spread when oil is expensive and other refiners maintain the big spread. If oil goes down and the spread narrows, the airline makes profits off low fuel prices. It is a very good, low cost hedge for a company heavily dependent on a fluctuating commodity. (as long as nothing goes wrong with the plant)
Crack spreads aren't based on raw material input prices (ie the price of a barrel of oil). Crack spreads are more a function of supply and demand.
The Trainer refinery provides Delta with a crack spread hedge. It does not provide a hedge on the price of a barrel of oil.
By driving down the cost of jet fuel on the East coast, Trainer is more successful than simply a $3 million profit. Here's an example; while New York jet fuel prices were dropping, New York refined gasoline prices were rising in April: http://www.bloomberg.com/news/2013-...l-hits-all-time-low-as-inventories-build.html