GBU-24

I was sniffing around the 4th floor the other day and heard this also about the 321...not so much from another airline though.

scambo1

What! Do they have new secretaries up there?

sailingfun

The article points out the obvious. The refinery was losing 1 billion dollars a year when shut down. If we make the expected savings of 300 million a year on jet fuel what happens to the loss of the rest of the product.

sailingfun

Kingfisher only had about 6 A321's. Why buy used when Airbus is in trouble with sales at the moment. Everyone is waiting on the NEO so they are facing the reality of parking unsold aircraft as they come off the assembly line. They are offering great deals on classic airbuses at the moment. The A321 however is well known as a pig and does not have real transcon range. The A321 NEO does have the range so not sure why we would jump in before it comes out. We could easily extend 757's until that time. Airbus just might however be willing to make a really great short term lease deal on classics that would be cheaper then the major overhuals on the 757's.

scambo1

Just my opinion on the trainer "losses": The issue is supply of crude to the refinery. Transportation by truck or train adds significantly to the cost of the inbound crude. Bakken is where we want to receive our supply, but for the time being, transportation cost is high. The price difference between Bakken, brent, and others has to include this cost.

As part of the Trainer deal, DAL does not sell the non-jet fuel, that is not ours to worry about...Why the article ties that to DAL is beyond me. OTOH, the jet fuel gets piped directly from Trainer to NYC airports. Since this is an example of vertical integration, what DAL uses is not taxed because there is no sale from trainer to DAL (cut out the tax man save a bunch on gas). Jet fuel DAL sells to competitors is taxed. DAL estimates that each gallon of trainer fuel we burn gives us a $.06 - .08 price advantage over our competition (before counting the tax advantage) I think after the 1st year the estimate is that this advantage rises to $.14/gallon.

The tax advantage part is speculation on my part - I have not heard this mentioned by any person or media, but it only makes sense to me.

My own opinion on Ruggles departure: DAL took some hedge losses last year. Ruggles was directed to take those, against his advice. That makes his resume look bad. DAL is, in a way, a vehicle for outside financial institutions to cover themselves. They provide liquidity and leverage to DAL, in turn DAL provides a captive market to them; but occasionally, DAL provides an illegitimate (legal) hedge for them...Like eating a hedge loss.

IMO, if you remove yourself from the quarter to quarter profit mentality, you will realize trainer is a win short to medium term.

Ferd149

I've been in lust, I mean love with Michelle Pfeiffer since "The Fabulous Baker Boys". Thanks FTB, how did ya know

georgetg

Sailing, that's simply not the case. The 321 with sharklets and the increased MTOW has transcon range. The 320 with the shark lets just got certified a few weeks ago and the 321 is a follow on.
Having a 319/320/321 fleet is however a network-guy's wet dream. You can sharpshoot markets and move capacity to where its needed while reducing it where its not...
Think about it:

• DC-9/717/Md88/MD90
• 737-700/737-800/737-900
• 757T/767ER/767-400

Each aircraft brings a similar aircraft often flown by the same category with increasing capacity...
Following that pattern, look at this:

• A319/A320/A321
• A333-200/A330-300/A340-600

The 321s can be traded for RJs to plug the hole left by some of the 757 coming up on heavy checks...
Even more importantly, network has a huge hole between 300 and 400 seats for international. I'd long thought we'd pull the trigger on the 777-300 but its a very pricey jet...On the other hand there's the 350ish seat A340-600. It fits right between the A330-300/777-200 and the 747-400.
At small airlines this jet is trouble because it's costly to run except for some very specific markets. But there even are markets particularly in South America where it outperforms the 777-300 because it has better hot and high performance with a full load...
Lufthansa has one of the best performance engineering departments and is very happy with theirs, once they found the right markets. They did find that they needed a few A330's in market with less capacity.

That brings us to Virgin Atlantic. VS recently returned four 340-600 and will return another four in the coming months. To Airbus, those jets (barely ten years old) are a problem because they aren't very desirable at airlines with small fleets (like Virgin) as a result they are dirt cheap for their pax/payload/range combination and have modern RR Trent 500 engines, and TechOps is familiar with the bigger brother Trent 800 on our original 777-200s...
With Virgin losing money and in dire need to rationalize it's fleet while adding a narrowbody for domestic feed, I see a distinct opportunity for a multi-party trade/order agreement here...
I would be not too surprised to see a handful of A312s and a few A340-600s taken up by Delta in the next few months.

Cheers
George

georgetg

Scambo, I agree. Trainer is a huge win.

The reason some refineries are having difficulties is because they are unable to participate in the futures markets and end up buying their raw material (crude) at near spot prices.
The crack spread (price of distillates - price of crude) unlike what you would imagine is not a 'profit margin" earned by refineries but by fuel hedgers...
But what most "analysts" are not taking into account is the fact that Delta already participating on a massive scale in the hedging game, adding the refinery lets Delta really take advantage of the hedges...

There very well might be a tax advantage, but in a perishable commodities business like an airline, every little margin over the competition is opportunity.
With the Trainer fuel at JFK we can match the other airlines on price and improve our margin or take the fight to them by undercutting their fares. That's a huge advantage over the saturated transatlantic routes...

Cheers
George

sinca3

Recently our flight was met by a couple of mechanics that were "looking" for something?!? I got off grab breakfast and when I returned they explained they are trying to catch the person put a certain graffiti in the cockpit. Per our conversation this specific graffiti has caught the attention and scour of upper managment so there is a big push to find the person.
I haven't seen what they were looking for, but then again there is always some writting in the cockpit so it never really jumps out at me...expect for maybe the one M90 I got in named "China Flipper", that one got a good chuckle!
Moral of story, if you are adding your handy work to the M88-90 fleet they are looking for you!

Sink r8

Assuming the price is right, wouldn't we have shorter, higher density routes in which the 321 would have acceptable performance, for example up-and-down the East Coast?