Delta Virtual Airlines Water Cooler | Airline Operations |
Delta getting into the oil business |
DVA596
Senior Captain, CRJ-200
OLP
Joined on June 15 2002
50 State Club
DVA Twenty-Year Anniversary
Online Quadruple Century Club
Everett 250 Club
Quincentenary Club
"Have you ever been in a Turkish prison??" Plano, TX
504 legs, 1,248.0 hours
489 legs,
1,225.0 hours online 501 legs,
1,241.6 hours ACARS 17 legs,
53.6 hours event
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Posted onPost created on
May 01 2012 01:03 ET by Gary Price
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http://www.foxbusiness.com/industries/2012/04/30/delta-to-buy-us-refinery-for-150m/
Very interesting business move. Could save Delta a ton of money....
Gary
Gary PriceSenior Captain, CRJ-200
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DVA4180
Senior Captain, MD-88
OLP
Joined on March 08 2007
Online Century Club
Long Beach Century Club
50 State Club
Triple Century Club
DVA Ten-Year Anniversary
"Have A&P - Will work for peanuts!" Van Buren Charter Township, MI
351 legs, 783.1 hours
193 legs,
388.4 hours online 340 legs,
759.3 hours ACARS 20 legs,
41.0 hours event
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Posted onPost created on
May 03 2012 14:27 ET by Joseph Schwab
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It will produce around 80% of our needed capacity!
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DVA3952
Captain, MD-88
Joined on September 07 2006
DVA Five-Year Anniversary
"Airbus, Mcdonnell Douglas" Chicago, IL USA
85 legs, 161.3 hours
51 legs,
106.0 hours online 77 legs,
141.3 hours ACARS
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Posted onPost created on
May 03 2012 17:10 ET by Alex Jevdic
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The fuel won't be free, they still have to buy the oil.
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DVA1038
Captain, B737-800
E-MAIL
Joined on January 12 2003
Century Club
"Celer, Silens, Mortalis" Summerville, SC USA
169 legs, 1,008.2 hours
56 legs,
288.5 hours online 25 legs,
221.2 hours ACARS 1 legs,
5.0 hours event
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Posted onPost created on
May 03 2012 17:12 ET by Kevin Cornish
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And buy fuel at airports not served by this refinery. From how I read it, this refinery will primarily serve JFK and La Guardia.
Kevin CornishCaptain, B737-800
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DVA4180
Senior Captain, MD-88
OLP
Joined on March 08 2007
Online Century Club
Long Beach Century Club
50 State Club
Triple Century Club
DVA Ten-Year Anniversary
"Have A&P - Will work for peanuts!" Van Buren Charter Township, MI
351 legs, 783.1 hours
193 legs,
388.4 hours online 340 legs,
759.3 hours ACARS 20 legs,
41.0 hours event
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Posted onPost created on
May 03 2012 22:09 ET by Joseph Schwab
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Kevin Cornish wrote:
And buy fuel at airports not served by this refinery. From how I read it, this refinery will primarily serve JFK and La Guardia.
Crude can be traded. It will NOT have to be supplied from just this location....
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DVA7670
First Officer, B777-200
Joined on August 14 2009
DVA Five-Year Anniversary
"Any landing you can walk away from..." Sharpsburg, GA USA
77 legs, 354.3 hours
75 legs,
349.5 hours ACARS
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Posted onPost created on
May 05 2012 17:49 ET by Dustin Thames
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The savings we expect to realize will come from not having to pay the crack spread markup that refineries charge to buy their products. This premium is THE driving factor behind this move as the crack spread has been increasing at a much faster rate than the price of oil or jet fuel.
The presentation the corporate office put out for this announcement stated that of the $12B spent on jet fuel in 2011, $2.2B was due to the crack price markup. By owning the refinery outright, Delta will be able to pass that savings on directly to the airline.
Dustin ThamesFirst Officer, B777-200
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DVA1038
Captain, B737-800
E-MAIL
Joined on January 12 2003
Century Club
"Celer, Silens, Mortalis" Summerville, SC USA
169 legs, 1,008.2 hours
56 legs,
288.5 hours online 25 legs,
221.2 hours ACARS 1 legs,
5.0 hours event
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Posted onPost created on
May 05 2012 18:49 ET by Kevin Cornish
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Joseph, correct me if I'm wrong, but how I understood the article, it said the the fuel produced by this factory would primarily be sent to JFK and LGA. As there is already a pipeline in place from Trainer to NYC. I have no idea where they are getting the crude from. Though I also read that Delta would trade the other fuels produced (gasoline and diesel) to Connoco Phillips (i think thats who it was) for an equal amount of Jet A. I just think its funny that alot of people are bashing Delta for this thinking they will never turn a profit on the refinery and lamenting how it will affect total capacity without taking a moment to realize that this is all about Delta cutting a major cost to give them an advantage, not about selling the finished product for a proffit. Though I'm sure they will if the opportunity presents itself. Any way you cut it, Delta will almost always have a lower fuel bill than any other airline around. I think this a great move for them!
Kevin CornishCaptain, B737-800
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DVA7670
First Officer, B777-200
Joined on August 14 2009
DVA Five-Year Anniversary
"Any landing you can walk away from..." Sharpsburg, GA USA
77 legs, 354.3 hours
75 legs,
349.5 hours ACARS
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Posted onPost created on
May 06 2012 00:56 ET by Dustin Thames
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Kevin Cornish wrote:
Joseph, correct me if I'm wrong, but how I understood the article, it said the the fuel produced by this factory would primarily be sent to JFK and LGA. As there is already a pipeline in place from Trainer to NYC. I have no idea where they are getting the crude from. Though I also read that Delta would trade the other fuels produced (gasoline and diesel) to Connoco Phillips (i think thats who it was) for an equal amount of Jet A. I just think its funny that alot of people are bashing Delta for this thinking they will never turn a profit on the refinery and lamenting how it will affect total capacity without taking a moment to realize that this is all about Delta cutting a major cost to give them an advantage, not about selling the finished product for a proffit. Though I'm sure they will if the opportunity presents itself. Any way you cut it, Delta will almost always have a lower fuel bill than any other airline around. I think this a great move for them!
You are right that the pipeline from Trainer can only serve the New York market, but since Delta won't utilize all of the Trainer supply at JFK/LGA, they'll be able to trade Jet-A in New York for Jet-A at other stations in the U.S.
And yes, the bashing from so-called oil 'experts' is quite comical. They seem to have absolutely no idea what we're trying to do.
Dustin ThamesFirst Officer, B777-200
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DVA1038
Captain, B737-800
E-MAIL
Joined on January 12 2003
Century Club
"Celer, Silens, Mortalis" Summerville, SC USA
169 legs, 1,008.2 hours
56 legs,
288.5 hours online 25 legs,
221.2 hours ACARS 1 legs,
5.0 hours event
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Posted onPost created on
May 15 2012 17:59 ET by Kevin Cornish
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http://online.wsj.com/article/BT-CO-20120515-704911.html
Just an update on it. Looks like the stock "experts" dont get it either. Why do people think Delta is doing this soley to make money? I'm sure Delta would like to make money from this, but that IS NOT what they're doing with it.
Kevin CornishCaptain, B737-800
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DVA7670
First Officer, B777-200
Joined on August 14 2009
DVA Five-Year Anniversary
"Any landing you can walk away from..." Sharpsburg, GA USA
77 legs, 354.3 hours
75 legs,
349.5 hours ACARS
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Posted onPost created on
May 19 2012 21:20 ET by Dustin Thames
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Kevin Cornish wrote:
http://online.wsj.com/article/BT-CO-20120515-704911.html
Just an update on it. Looks like the stock "experts" dont get it either. Why do people think Delta is doing this soley to make money? I'm sure Delta would like to make money from this, but that IS NOT what they're doing with it.
No kidding. Don't get why it's so difficult to comprehend. It's quite simple, really.
1) Refinery XYZ charges a markup on refining 'costs'.
2) Delta buys own refinery so that they don't have to pay the markup charged by XYZ.
Dustin ThamesFirst Officer, B777-200
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