Any "Latest & Greatest" about Delta?
The refinery takes this one step further. It doesn't matter what comes out of the refinery and I doubt much if any "jet fuel" will ever make it from that refinery into a Delta jet. It's more about having a tool to fine tune hedges minimizing risk and maximizing yield.
Cheers
George
Cheers
George
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Joined APC: Jun 2008
Posts: 3,716
Gets Weekends Off
Joined APC: Jun 2008
Posts: 3,716
I think they're different things. Hotels and rental cars are attempts to expand your business opportunities with the danger of getting too far outside your core business. The refinery is an attempt to control your supply chain. It's definitely thinking outside the box. We either end up with a refinery or the speculators get nervous and look for other opportunities............or we get our a$$ kicked
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Joined APC: Jul 2010
Position: window seat
Posts: 12,522
Compare and contrast priceline and many others to the massive day trader paper mark up crowd that's now threatening to cull refining capacity to put even more upwards pressure on gas.
This seems like a really smart idea in theory, if its done right. Even then, and especially if others follow suit, that could deal a big blow to at least the crack spread portion of the insane petroleum mark ups. If it does, even a well run refinery could appear to be a money loser at that point...but that's probably part of the goal. If it depresses the end price of jet-A to the point that the refinery itself isn't making money or even losing money, then by default we're getting jet fuel a lot cheaper.
Then it will be a constant struggle to stay the course because the quarterly bonus monger hatchet men will see an opportunity to get rid of an isolated paper loss on the balance sheet today for a nice quarterly result tomorrow and then back to where we are now with the over all gas manipulation mark ups. The same logic that says to pull flights out of any market you're not "making money on". While that sounds great, it puts you in the position that any competitor can seat dump/cherry pick anything in your network they want to and as long as it hurts your performance you bail. You have to stick to those markets, and sometimes even double down and make them bleed more, because to instantly submit and yield market share at a competitors discretion is exactly how today's cutsey start up LCC in endless growth mode with a massive fantasy order book ends up becoming tomorrow's SWA.
The refinery thing could be a good long term deal, if its done right, even if the nose of wall street doesn't like the perceived line item profit lines its snorting that quarter. Being done right is a pretty big if though.
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Joined APC: Jul 2010
Position: window seat
Posts: 12,522
That was a great 411, and I'm glad he's our guy as well. The takeaway for me is that the refinery and hedging are tools to control fuel cost in the same way insurance reduces financial exposure for unforseen events.
Prior to this Delta's fuel strategy has been using so called collars, a type of hedge that limits upward and downward exposure while limiting expense.
The refinery takes this one step further. It doesn't matter what comes out of the refinery and I doubt much if any "jet fuel" will ever make it from that refinery into a Delta jet. It's more about having a tool to fine tune hedges minimizing risk and maximizing yield.
No other player in the oil trading space, absent hedges, benefits from a market downturn the way Delta does. Now can we please hire some Wall Street guy to tell Delta to become just as vertically integrated and bring more flying in-house...
Cheers
George
Prior to this Delta's fuel strategy has been using so called collars, a type of hedge that limits upward and downward exposure while limiting expense.
The refinery takes this one step further. It doesn't matter what comes out of the refinery and I doubt much if any "jet fuel" will ever make it from that refinery into a Delta jet. It's more about having a tool to fine tune hedges minimizing risk and maximizing yield.
No other player in the oil trading space, absent hedges, benefits from a market downturn the way Delta does. Now can we please hire some Wall Street guy to tell Delta to become just as vertically integrated and bring more flying in-house...
Cheers
George
Gets Weekends Off
Joined APC: Jul 2006
Position: Boeing Hearing and Ergonomics Lab Rat, Night Shift
Posts: 1,724
Gets Weekends Off
Joined APC: Jul 2006
Position: Boeing Hearing and Ergonomics Lab Rat, Night Shift
Posts: 1,724
Letter Writing
Delta keeps asking us write letters to lawmakers to "help" the company.
What have been the end results for the Delta pilots that took the time to "help?"
Stop the Export Import Bank from giving loans to foreign airlines
SOS, Stop Oil Speculation
Win in NYC:
Cheers
George
Delta keeps asking us write letters to lawmakers to "help" the company.
What have been the end results for the Delta pilots that took the time to "help?"
Stop the Export Import Bank from giving loans to foreign airlines
- European Exim Banks offer low interest loans on Airbus
- Canadian Exim Bank offer low interest loans on Bombardier
- US Exim bank provides loan to GOL for Delta engine MRO services
SOS, Stop Oil Speculation
- Delta expands hedging operation
- Hires Wall Street energy market expert
- Attempts to purchase Refinery
Win in NYC:
- Slot swap approved, 92% RJ flying
- "When the markets develop, we will upgauge"
- Most established market LGA ORD and now LGA BOS all RJ flying
Cheers
George
well we should have a letter writting campaign:
"we want to stop outsourcing our work to other airlines and we want a pay raise."
"we want to rename the airline Spackleair."
"we want to stop outsourcing our work to other airlines and we want a pay raise."
"we want to rename the airline Spackleair."
Line Holder
Joined APC: Aug 2008
Position: A320
Posts: 65
Anderson at the Aviation Summit today.
Richard Anderson Remarks at Aviation Summit - C-SPAN Video Library
Richard Anderson Remarks at Aviation Summit - C-SPAN Video Library
Anderson at the Aviation Summit today.
Richard Anderson Remarks at Aviation Summit - C-SPAN Video Library
Richard Anderson Remarks at Aviation Summit - C-SPAN Video Library
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