Phillips 66, a Philadelphia-area oil refinery, will be
acquired by Delta Airlines through the subsidiary company, Monroe Energy. Delta
hopes to use this refinery to satisfy 80% of the airline’s domestic fuel needs
by doubling the refinery’s jet fuel production.
Monroe energy will invest $250 million dollars in the new
venture, allocating financial resources to refinery improvements and marketing
campaigns with BP and Phillips 66. Although the price tag is high, Delta
estimates that fuel costs will be reduced by $300 million dollars annually and
limit its “exposure to fuel volatility”.
Michael Patton, CMM, believes that it is a smart move for a
company with such high fuel usage to be involved in the fuel production
process. Combined with the millions in fuel expense reduction, this should be a
positive step for Delta Airlines.
Delta expects the transaction to be completed by the end of
June.
Source: Business
Travel News
Oil Refinery's are a great investment. When I was working on a frac pump refurbishing for one of my customers, they were telling me about this particular plan. It is definitely a positive step for Delta.
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