Originally Posted by
MaxQ
I do not expect to see the legacies fly anything under 100 seats, and am personally skeptical that Delta's 100 seat experiment will work out when fuel prices go up and the collapse of the more rural economies accelerates.
You don't think Delta's higher operating costs for the CS fleet are being offset by the Trainer, PA refinery profits? They're currently beating the crack spread by about $16/barrel which equates to $3M per DAY.
The refinery's original forecast was for annual contributions of $300M, but with storm Sandy and some EPA compliance costs they were late achieving that. In the aftermath of Houston's post Harvey refinery woes, it'll be Q4-Q1 before the industry regains domestic equilibrium. In the short term it looks like DAL's Trainer refinery can easily beat the original revenue forecast in less than 2 quarters.
DAL makes more money than UAL because of the better focus on fully distributed network costs and contributions. UAL is starting to show signs of life on that front, but is still years behind. I agree with you that it'll be interesting to see how DAL's strategy for hedging fuel expense will stack up against UAL's auxiliary fee revenue model when global fuel prices rise.