Delta Airlines Buys Oil Refinery

Pinnacle Digest writes: When Delta Airlines announced it was purchasing an oil refinery, it made news across the world. It is the first purchase of its kind by an airline. Dian Chu explains the pros and cons associated with Delta owning a refinery and how the deal was structured - from government incentives to JP Morgan's commodity team running the importing and sale side. Even though Delta would own the refinery and has effectively bought it, Delta will ultimately buy it from JP Morgan at wholesale prices!

As oil falls from the sky and the economy begins to show signs of contraction, this is an interesting move by Delta that warrants a discussion on its chances of becoming the norm. Fuel represents the largest expense of an airline. It’s no wonder an airliner has finally stepped into the refinery business.


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