DL signs 5 year deal for domestic crude for Trainer

[WorldTraveler]

Delta Air Lines Inc. (DAL), the largest U.S. carrier by market value, is trying to cash in on the biggest oil boom in the nations history by bringing more domestic crude to its refinery near Philadelphia.

The Atlanta-based airline signed a five-year agreement with Addison, Texas-based midstream company Bridger LLC to supply the Trainer, Pennsylvania, refinery with 65,000 barrels of crude a day, more than a third of the plants capacity.

Bridger is acquiring 1,300 crude-by-rail cars and has a contract to load 80,000 barrels of crude a day from Enbridge Inc. (ENB)s rail terminal in Eddystone, Pennsylvania, onto barges that can deliver crude to Trainer. Delta may build a pipeline connecting the Trainer refinery to the terminal, Burnett said.

Bridger will initially deliver Bakken crude from North Dakota to the refinery, Chief Executive Officer Julio Rios said in an interview at Bloombergs Houston bureau July 18. The sourcing may change over the length of the contract depending on economics and the refinerys needs, he said.

So long as the U.S. restricts exports of crude oil, American producers will have to price their crude low enough to be competitive with imports, Campbell said.

all above are quotes from
http://www.bloomberg.com/news/2014-07-21/delta-deal-to-bring-u-s-crude-to-pennsylvania-refinery.html?cmpid=yhoo

 

[700UW]

And how much of a profit has Trainer turned?
 
Oh that would be ZERO.

 

[WorldTraveler]

and yet DL has managed to supply the airline with the lowest cost jet fuel in the US industry.

wanna wait a few more days to see how much they managed to save over the competition on fuel this quarter?

you obviously missed the memo in which DL said that the purpose of Trainer was not to make a profit on a standalone basis but to provide lower cost fuel for the airline.

DL has succeeded at doing that and will undoubtedly do it again this quarter. just you watch.

 

[700UW]

A business will not stay open if they dont turn a profit, you do know that is Business 101?

 

[FrugalFlyerv2.0]

you obviously missed the memo in which DL said that the purpose of Trainer was not to make a profit on a standalone basis but to provide lower cost fuel for the airline.
 

 
I wonder how long DL shareholders will tolerate the several hundred million dollar annual losses on the refinery? 

 

[WorldTraveler]

and once again, you CANNOT grasp that the point of the refinery NEVER was for the refinery to operate as a profitable standalone operation.

Why don't you find evidence from Delta saying that was the goal if you believe it to be true.

Trainer has saved DL hundreds of millions of dollars in fuel costs; other airlines have indeed benefitted and yet DL has had the highest profit margin in the industry.

look at the chart in section 8 and you will see that DL had a 9 cent/gallon fuel cost advantage over AA, 13 centa over UA, and 16 cents compared to WN.

considering that the big 3 spend over $10 BILLION/year on fuel, a 3 cent/gallon benefit in fuel costs translates into $100 MILLION savings in fuel costs.

feel free to throw the dirt about the OPERATIONAL losses at Trainer. What you cannot deny is that DL has figured out how to save on fuel costs and it translates into far more savings to the AIRLINE that AA, UA, or anyone else gets in new technology aircraft compared to DL's older aircraft and lower acquisition costs.


we'll get to see the difference in fuel costs within a few days.

I have a feeling only the most ignorant posters on here will continue to post about operational losses at the airline in light of the hundreds of millions of dollars in lower fuel costs that DL is enjoying.

we are blessed with some of the more - perhaps most - ignorant bizkids on this board.

 

[FrugalFlyerv2.0]

Well surprise surprise!
 
You're kind of quick to circle the wagons for DL.
 
Perhaps you should grasp this:  DL is an airline, a transportation industry.  Not petrochemicals.
 
Remember how well Allegis Corp. worked for UAL ... ... ...

 

[FrugalFlyerv2.0]

we are blessed with some of the more - perhaps most - ignorant bizkids on this board.

 
I could not have described you any more eloquently.

 

[WorldTraveler]

of course you resort to the same childish behavior that everyone else on here does who is confronted with the fact that they cluelessly ignore the obvious.

why would we expect anything else from you?

the only thing that is circled is the major cost advantage DL has compared to its competitors.

you can't deny that DL paid 3% less for fuel that even its closest competitor; 5% less than others - that is not funny money and it isn't the difference in throwing in rental car or hotel losses.

No one really cares what UAL did with Hertz or anyone else - except you.

DL stockholders care a whole lot that DL has a strategy that cuts costs by hundreds of millions of dollars per year compared to its competitors.


And DL employees get profit sharing based on DL's superior ability to manage fuel costs.

anywhere from 3 to 5% lower fuel costs translates into a whole lot of profit sharing; and then there are a lot of people in the airline industry whose employers and unions decided profit sharing isn't worth it - so everything they do to help the company win goes right into the executives and shareholders pockets - with employees getting the same regardless of how well the company does or does not do.

 

[Hope777]

and once again, you CANNOT grasp that the point of the refinery NEVER was for the refinery to operate as a profitable standalone operation.

Why don't you find evidence from Delta saying that was the goal if you believe it to be true.

Trainer has saved DL hundreds of millions of dollars in fuel costs; other airlines have indeed benefitted and yet DL has had the highest profit margin in the industry.

look at the chart in section 8 and you will see that DL had a 9 cent/gallon fuel cost advantage over AA, 13 centa over UA, and 16 cents compared to WN.

considering that the big 3 spend over $10 BILLION/year on fuel, a 3 cent/gallon benefit in fuel costs translates into $100 MILLION savings in fuel costs.

feel free to throw the dirt about the OPERATIONAL losses at Trainer. What you cannot deny is that DL has figured out how to save on fuel costs and it translates into far more savings to the AIRLINE that AA, UA, or anyone else gets in new technology aircraft compared to DL's older aircraft and lower acquisition costs.


we'll get to see the difference in fuel costs within a few days.

I have a feeling only the most ignorant posters on here will continue to post about operational losses at the airline in light of the hundreds of millions of dollars in lower fuel costs that DL is enjoying.

we are blessed with some of the more - perhaps most - ignorant bizkids on this board.

Question.... How much did it cost per gallon to produce... to save that 9 cents per gallon?

 

[FrugalFlyerv2.0]

DL stockholders care a whole lot that DL has a strategy that cuts costs by hundreds of millions of dollars per year compared to its competitors.

 
Maybe DL shareholders should be reminded how much money DL lost operating a refinery compared to its competitors? 
Afterall, not too long ago an ignorant bizkid lectured on how the goal of publically traded corporations is to make maximum profits - and not to make money losing investments.  WholeTruthTM
But feel free to spin away as usual.
 
Oh well, too bad Anderson is a legal guy and not a genuine numbers guy ... ... ...

 

[WorldTraveler]

those are DL's ALL IN FUEL costs... as they are for every other airline.


They include the refinery losses, hedge gains and losses, and the whole nine yards.

The notion that DL's refinery losses are standalone is a myth. Everything that happens at the refinery has to be reflected in the airline's financial statements because DL runs an airline, not a refinery.

This isn't about UA's subsidiaries that had nothing to do with the production of an airline seat mile.

Again, DL has a strategy that produces fuel for the airline that far exceed the operational losses at the refinery and also provide a very significant competitive advantage.

there will be people who will never admit that DL has figured out how to beat its competitors but you can be assured there will be ample reminders of the fuel cost advantage that DL has, despite whatever losses the refinery has reported.

frugal fits right into that category of being penny wise and pound ignorant.

 

[Kev3188]

No one really cares what UAL did with Hertz or anyone else - except you.

I do.

I think it's an interesting comparison to bring up. All kinds of different angles one could take if they so chose... Might be a refreshing change from the usual...

 

[WorldTraveler]

you may find it interesting but it largely stems from your desire to argue with anything that would be counter to those that challenge you and your ideas.

Allegis had nothing to do with the production of an airline passenger seat.

Trainer is absolutely related to DL's ability to competitively provide air service.

Anyone who wants to should be able to see the difference even in concept.

Anyone that bothers to even click on the link I provided can see that DL has had the lowest fuel costs in the US carrier industry; UAL could never have said that because of Allegis.

 

[FrugalFlyerv2.0]

those are DL's ALL IN FUEL costs... as they are for every other airline.


They include the refinery losses, hedge gains and losses, and the whole nine yards.

The notion that DL's refinery losses are standalone is a myth. Everything that happens at the refinery has to be reflected in the airline's financial statements because DL runs an airline, not a refinery.

This isn't about UA's subsidiaries that had nothing to do with the production of an airline seat mile.

Again, DL has a strategy that produces fuel for the airline that far exceed the operational losses at the refinery and also provide a very significant competitive advantage.

there will be people who will never admit that DL has figured out how to beat its competitors but you can be assured there will be ample reminders of the fuel cost advantage that DL has, despite whatever losses the refinery has reported.

frugal fits right into that category of being penny wise and pound ignorant.

 
No, you're wrong (almost as usual, I might add).
I can admit DL is a good company.  It is a good company. 
 
However, purchasing and more importantly operating a refinery at a loss looks like a blunder.  Period.
 
As for the namecalling, it isn't the Christian thing to do.  However, witnessing your arrogance on here, I'm not surprised you don't or can't grasp that concept.