Originally Posted by
sailingfun
You seem to not understand that the two companies were merged. You don’t merge and retain 100% ownership. Typically ownership percentages are based on the relative size of each company. If you can merge a company with another and retain 100% ownership you are in the wrong business!
The refinery does not save Delta any more at 50 a barrel then 140 a barrel. It’s strickly the amount they can reduce the crack spread which is the same. In the case of Jet Fuel they were seeing about a 7 cent per gallon reduction. The other refineries dropped their crack spread and all the other airlines paid the same for fuel as Delta. They gained nothing.
No i sure didn't miss that. Otherwise I'd be pretending Delta still wholly owned DGS. Our discussion was why they merged and why delta gave up anything to a private company. You're clearly having a conversation, I just don't know with who, and I'm not going to repeat the same things.
Look back, at the refinery purchase, the stated goal was to run the jet fuel operation at a "loss" when oil jumped up in price and there'd be more margin to play with. Furthermore anderson would argue they weren't dropping the price for every airline, just theirs, so the other refineries choice would be ex-market discount (preventing the need for other refineries to drop their price except for a partial demand drop). Choices made by Warmann excluded, the refinery wasn't profitable before the merger and wasnt planned to be profitable afterwards, just meant to be a living hedge against a surge in demand that never came.