Delta Air Lines to Enter the Oil Refinery Business?

Is Delta Air Lines about to become a more refined airline — or are reports fueling the speculation of this news still too oily to confirm at this time?

Delta Air Lines to Enter the Oil Refinery Business?

An announcement of a deal for an oil refinery in Trainer, Pennsylvania owned by ConocoPhillips to be purchased by Delta Air Lines for $150,000,000.00 and financed by brokerage firm JP Morgan could occur any day now. This refinery purportedly has the capability to process 180,000 barrels of oil per day, and it supposedly produces a higher percentage of jet fuel than any other oil refinery located of the east coast of the United States.

Summary

At first glance, there are those who are gushing that this appears to be a smart move: own the oil refinery and purchase jet fuel produced from it at wholesale prices, thereby increasing profits by lowering fuel expenses. However, is it a “slippery slope” for two entities — one whose expertise is the air transportation of passengers and goods, the other whose expertise is in finance — to enter a business about which they supposedly know little and may potentially get burned?

FlyerTalk members discuss this very interesting developing story. What do you think?

Photograph ©2007 by Brian Cohen.

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