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Started By
Message
re: Delta board signs off on deal to buy Trainer refinery
Posted on 4/21/12 at 10:52 am to kfizzle85
Posted on 4/21/12 at 10:52 am to kfizzle85
quote:
as well as any regulatory or environmental issues that could arise.
+ gazillions. Lose a plane, not a small deal, but manageable. Blow up a refinery or have to shut it done for environmental/safety concerns or for retooling....not profit.
Sounds like IB's and Greeks with bearer bonds. I don't get it at all. I would love to have heard the convo around that board table.
1
Posted on 4/21/12 at 3:11 pm to tirebiter
Again, this is par for the course with this executive leadership. If is a dumb move for the company or the customer they are bound to make it...
Posted on 4/21/12 at 3:26 pm to Golfer
They are at least trying something....
This post was edited on 4/21/12 at 3:27 pm
Posted on 4/21/12 at 4:20 pm to Tigah in the ATL
quote:
At the minimum, this looks like another way to hedge fuel costs
If this was the way to hedge jet fuel costs Southwest Airlines would have a refining subsidiary by now.
Posted on 4/21/12 at 8:00 pm to kfizzle85
Southern Kansas...Goldman Sachs and a group of investors owned at the time.
Posted on 4/21/12 at 8:08 pm to kfizzle85
I agree with everything kfiz said here. Especially the capital intensive part.
Posted on 4/21/12 at 9:00 pm to Quidam65
quote:Because SW is a bunch of geniuses?
If this was the way to hedge jet fuel costs Southwest Airlines would have a refining subsidiary by now.
SW is just a player who can select routes for profitability. The nature of legacy carrier routes is higher costs. Anyone can make money without hub & spoke.
Posted on 5/1/12 at 8:12 am to Tigah in the ATL
LINK
Bump for some new info:
Do they have to pay taxes on the exchanges or the fuel they use themselves? That could be pretty profitable...
Bump for some new info:
quote:
The facility will also produce other products, such as gasoline and diesel, that Delta will exchange for jet fuel produced by BP and Phillips 66. These exchanges, combined with the refinery's jet fuel output, will cover 80% of Delta's fuel needs in the U.S., the company said
Do they have to pay taxes on the exchanges or the fuel they use themselves? That could be pretty profitable...
Posted on 5/1/12 at 9:20 am to C
I would be shocked if there isn't still a tax there, but I don't know, that's a great question. It sounds similar to a transfer pricing situation, maybe Poodle can drop some knowledge on us. I'm not up on the diesel and gasoline to jet fuel spreads, but I would again imagine it adheres to the current economics of refining as it is at the moment. Doesn't really change anything from my point of view, they're still more exposed to commodity prices, not less. Unless of course that's what they were going for. 
Posted on 5/1/12 at 9:41 am to kfizzle85
quote:
they're still more exposed to commodity prices, not less.
I thought it was funny/ingorant in the article I posted they said this would allow them to avoid the price hikes of speculation...
Are they going to be drilling their own wells?
Posted on 5/1/12 at 9:51 am to kfizzle85
quote:
I would be shocked if there isn't still a tax there, but I don't know, that's a great question. It sounds similar to a transfer pricing situation,
Interesting question, I do not see how they could get around taxes because they would technically be "selling" to someone and not to a subsidiary (transfer pricing). I would like to know the answer as well.
Posted on 5/1/12 at 9:56 am to C
Again reminded why the media be the media. Go find that guy and press him on that issue "so how exactly is that?? Oh you don't know because you have no idea what you're talking about? That's what I thought."
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