Any "Latest & Greatest" about Delta?
05-17-2012, 01:05 PM
No longer cares
Joined APC: Mar 2008
Position: 767er Captain
Posts: 12,109
Because Delta bought an idled plant that requires upgrades and workers, it also can only refine the most expensive type of oil on the market (3-year contract with BP oil). Also, introducing more jet fuel into the northeast, could, inadvertently cause DAL's competitors jet fuel costs to lower.
In your example, you didn't say PSX bought a trucking company that didn't have any drivers, dispatchers, mechanics and all of their trucks needed expensive upgrades to be legal, as well as running on the most expensive fuel.
In your example, you didn't say PSX bought a trucking company that didn't have any drivers, dispatchers, mechanics and all of their trucks needed expensive upgrades to be legal, as well as running on the most expensive fuel.
In my example though, I was thinking that PSX would hire all of Joe's people.. just as DAL is doing with the PSX folks who have the corporate knowledge to run THAT refinery.. or at least offering them first dibs on their old jobs.
I am sure it is quite obvious, but I am extremely optimistic. I think this will be a really really good thing for us, and we have the right guy at the helm.
05-17-2012, 01:09 PM
Gets Weekends Off
Joined APC: Dec 2009
Posts: 1,236
Because Delta bought an idled plant that requires upgrades and workers, it also can only refine the most expensive type of oil on the market (3-year contract with BP oil). Also, introducing more jet fuel into the northeast, could, inadvertently cause DAL's competitors jet fuel costs to lower.
In your example, you didn't say PSX bought a trucking company that didn't have any drivers, dispatchers, mechanics and all of their trucks needed expensive upgrades to be legal, as well as running on the most expensive fuel.
In your example, you didn't say PSX bought a trucking company that didn't have any drivers, dispatchers, mechanics and all of their trucks needed expensive upgrades to be legal, as well as running on the most expensive fuel.
05-17-2012, 01:11 PM
Gets Weekends Off
Joined APC: Jun 2007
Position: Legacy FO
Posts: 4,105
I completely understand your points, and I agree with you. I was just pointing out what the nay-sayers, many of which are oil refinery experts, are saying. I hope DAL proves them wrong.
05-17-2012, 01:12 PM
Gets Weekends Off
Joined APC: Feb 2008
Position: Urban chicken rancher.
Posts: 6,070
Interesting angle. I guess it could cause costs to go down in the NE.. but I do not think it would be significant.. I guess we will find out..
In my example though, I was thinking that PSX would hire all of Joe's people.. just as DAL is doing with the PSX folks who have the corporate knowledge to run THAT refinery.. or at least offering them first dibs on their old jobs.
I am sure it is quite obvious, but I am extremely optimistic. I think this will be a really really good thing for us, and we have the right guy at the helm.
In my example though, I was thinking that PSX would hire all of Joe's people.. just as DAL is doing with the PSX folks who have the corporate knowledge to run THAT refinery.. or at least offering them first dibs on their old jobs.
I am sure it is quite obvious, but I am extremely optimistic. I think this will be a really really good thing for us, and we have the right guy at the helm.
05-17-2012, 01:24 PM
Gets Weekends Off
Joined APC: Jul 2006
Position: Boeing Hearing and Ergonomics Lab Rat, Night Shift
Posts: 1,724
4Q2011 DOT profit margin
DAL 9.7%
B6 7.3%
AS 6.9%
CO 4.7%
WN 4.0%
US 3.3%
UA -2.7%
AA -13.4%
Cheers
George
DAL 9.7%
B6 7.3%
AS 6.9%
CO 4.7%
WN 4.0%
US 3.3%
UA -2.7%
AA -13.4%
Cheers
George
05-17-2012, 01:31 PM
Gets Weekends Off
Joined APC: Jul 2006
Position: Boeing Hearing and Ergonomics Lab Rat, Night Shift
Posts: 1,724
The refinery has workers, they are all staying keeping their jobs, Union guys, and they have a TA...
Contrary to what you might hear, refineries aren't that capital intensive to upgrade. What is really killing refineries ironically enough is the crack spread. Most smaller refineries are unable to participate in the commodities markets to secure the crude supply and for a single day the outlay might be in excess of 200M well in advance.
Delta's benefit and what most of the analysts don't get, is that we are already buying the crude supply in the form of hedges. Delta is already participating in the risky side of the refining business...
Then if our hedge worked out we can take delivery = gain.
If our hedge is upside down Delta gains because with lower fuel cost airline profit increases...
Many more levels to that and much more nuanced...
Cheers
George
Contrary to what you might hear, refineries aren't that capital intensive to upgrade. What is really killing refineries ironically enough is the crack spread. Most smaller refineries are unable to participate in the commodities markets to secure the crude supply and for a single day the outlay might be in excess of 200M well in advance.
Delta's benefit and what most of the analysts don't get, is that we are already buying the crude supply in the form of hedges. Delta is already participating in the risky side of the refining business...
Then if our hedge worked out we can take delivery = gain.
If our hedge is upside down Delta gains because with lower fuel cost airline profit increases...
Many more levels to that and much more nuanced...
Cheers
George
05-17-2012, 01:43 PM
Gets Weekends Off
Joined APC: Sep 2008
Position: Kickin’ Back
Posts: 6,971
Because Delta bought an idled plant that requires upgrades and workers, it also can only refine the most expensive type of oil on the market (3-year contract with BP oil). Also, introducing more jet fuel into the northeast, could, inadvertently cause DAL's competitors jet fuel costs to lower.
In your example, you didn't say PSX bought a trucking company that didn't have any drivers, dispatchers, mechanics and all of their trucks needed expensive upgrades to be legal, as well as running on the most expensive fuel.
In your example, you didn't say PSX bought a trucking company that didn't have any drivers, dispatchers, mechanics and all of their trucks needed expensive upgrades to be legal, as well as running on the most expensive fuel.
Denny
05-17-2012, 01:50 PM
Gets Weekends Off
Joined APC: Jul 2006
Position: Boeing Hearing and Ergonomics Lab Rat, Night Shift
Posts: 1,724
DAL stock is getting spanked for a "no-growth" Capacity Discipline strategy:
Cheers
George
Cheers
George
05-17-2012, 02:05 PM
On Reserve
Joined APC: Mar 2008
Posts: 12
All I want to know is... Do we have flow-back rights at the refinery? Might be a good option for the NYC folks.
05-17-2012, 02:28 PM
Gets Weekends Off
Joined APC: Jun 2010
Position: Doing what you do, for less.
Posts: 1,792
I don't see how Delta can make a refinery work.
They don't control the price of the crude oil coming in or the Jet-A going out. The only way they can compete with all the big oil companies is to be able to do it cheaper. I would be amazed if Delta, an airline, can do it cheaper than the experts in the field (Exxon, Conoco, BP, etc) who have been doing it for decades and have the established infrastructure.
Thats why a lot of these small refineries aren't operating. Both crude and Jet-A are commodities. You can't make a profit on the price of either, its solely operating costs. If the refinery isn't as cheap as a refinery elsewhere, its going to lose money and shut down no matter what the demand.
They don't control the price of the crude oil coming in or the Jet-A going out. The only way they can compete with all the big oil companies is to be able to do it cheaper. I would be amazed if Delta, an airline, can do it cheaper than the experts in the field (Exxon, Conoco, BP, etc) who have been doing it for decades and have the established infrastructure.
Thats why a lot of these small refineries aren't operating. Both crude and Jet-A are commodities. You can't make a profit on the price of either, its solely operating costs. If the refinery isn't as cheap as a refinery elsewhere, its going to lose money and shut down no matter what the demand.
Thread
Thread Starter
Forum
Replies
Last Post
