Delta in the Refinery Business?
Even if I said in my other blog Why I Stopped Reading the Business Section I didn’t have anything better to do so I read the business section a few days ago and an article drew my attention.
Delta, the world’s second-biggest airline by traffic, is in talks with Conoco to acquire its Trainer, Pa., facility at a cost of $100 million to $150 million, one person familiar with the matter said. Delta would hire an outside firm to run the refinery.
The move could help supply Delta’s operations at La Guardia airport and John F. Kennedy International Airport in New York, and save it most of the so-called crack spread, or the difference charged by a refinery between the cost of a barrel of crude and a barrel of jet fuel. In March, the spread between jet fuel and Brent crude, which is the benchmark that determines the price of most crudes delivered to the East Coast, was $12.85 a barrel, according to energy consultancy IHS Purvin & Gertz.
It is something unheard of. “We are a little uncomfortable about the company going outside its core expertise,” said Hunter Key, an analyst who covers Delta for Wolfe Trahan & Co. “I can’t recall any other airline buying a refinery.”
It would be interesting to see the outcome; perhaps this will start a trend among airlines.
A bit little is done on the end of ticket costs as far as consumers are concerned.