Trainer loses $100 Million this year

[700UW]

From another web page:
 
Bastian/Anderson comments at investor meeting in New York right now -

$100M lost at Trainer in '13
Modest profit for Trainer in '14
Trainer upgrades completed in 2014 1Q
Trainer production 40% jet and diesel in '14
Contracts to supply 70,000 BBL/day u.s. crude in '14
Trainer to lower avg crude costs $2-$3/BBL in '14
Trainer still "great success for Delta
 
 

 

[metopower]

Damn and Still 2 billion profit .But thanks for the info.

 

[WorldTraveler]

From another web page:
 
Bastian/Anderson comments at investor meeting in New York right now -

$100M lost at Trainer in '13
Modest profit for Trainer in '14
Trainer upgrades completed in 2014 1Q
Trainer production 40% jet and diesel in '14
Contracts to supply 70,000 BBL/day u.s. crude in '14
Trainer to lower avg crude costs $2-$3/BBL in '14
Trainer still "great success for Delta

sort of like the MasterCard ad

priceless:

"great success for Delta"

you do realize the risk to the rest of the industry when other refiners start reducing their production of jet fuel to push up their margins since Trainer has trashed the margins on jet fuel?
DL will have a supply of jet fuel while other carriers will be at the whims of the market

And you thought this would all play out in one year.

 

[BABABOOY]

wow, Talk about burying the lead, Delta made 2.6 Billion for the year!  Trainer lost 100 m however Delta made up more than that amount due to trainer being able to lower Delta's fuel cost.  As stated "trainer is a great success for Delta".    Here is a great article to read    http://www.businessweek.com/articles/2013-12-11/why-delta-thinks-its-better-than-a-mere-airline

 

[Kev3188]

"Trainer lost 100 m however Delta made up more than that amount due to trainer being able to lower Delta's fuel cost."
 
To me, the interesting question is; By "paying" $100m in losses, how much did (or will) we save?
 
I'd also be curious to know more about the upgrades 700UW noted, and how they may impact the profit/loss of the refinery.

 

[FWAAA]

The real news for AA and UA is that Delta has said that its investment in Trainer actually reduced the crack spread in the Northeast, saving everyone money on jet fuel.    Delta needs to solve that free-rider problem.  

 

[eolesen]

Yep, that point was made by several people before the purchase, but we were told the benefit outweighed the risk.

Unless they want to build out the infrastructure needed to pipe Trainer's output up to JFK or down to ATL, I doubt they'll ever get rid of the problem as long as they have to sell fuel (as well as all the other cuts) on the open market.

 

[WorldTraveler]

you do realize that the Trainer purchase included pipelines to NYC?

DL does use its own jet fuel. It sells the non-jet fuel products in swaps for jet fuel in other markets.

DL did in fact lower the cost of jet fuel in the entire market, not just for itself.
But DL also lowered the cost of its largest expense... and yet revenue did not go down so DL is ahead, even if it has helped other carriers as well.

There are a lot of people who haven't thought this whole process thru. Trainer is putting a lot of pressure on other refiners who also sell jet fuel, but who aren't focused on jet fuel as their only product.

The US is exporting jet fuel for the first time in years because of an excess.

At some point, the chances are real high that other refiners start changing their refining processes to reduce the supply of jet fuel.. at that point, DL is in a far better position relative to its peers who have to buy jet fuel on the open market.

The problem w/ the whole Trainer issue is that far too few people have been able to see the big picture, focusing at best on the actual cost of running a refinery.

 

[FrugalFlyerv2.0]

Hopefully in the long run the "Trainer experiment" won't do to DL what Allegis did to UA ... ... ...

 

[WorldTraveler]

It will be worth watching but the signs are very much that DL has got a strategy that is working, even if they can't really take credit for lowering the price of a commodity.

BTW, DL has said that the refinery will become profitable even on a standalone basis in 2014.

DL also said that Trainer is one of the most cost-efficient refineries in the NE.