Delta Puts on the Cowboy Boots and Considers Getting into the Oil Game
There’s all kinds of ways in which this might not be the most slick of ideas, but if things work out Delta might just be laughing all the way to the bank. The world’s former largest airline—United now holds that crown—is thinking about a pretty unique way to pay for all that airplane gas it needs.
They’re going about it through the purchase of their very own oil refinery. We’d imagine that airline officials know a little bit more about planes and passengers than petroleum, but they must be pretty confident that they know what they’re doing.
It sounds like everything is still very much on the drawing board at this point, but Delta is thinking about placing a bid for a ConocoPhillips refinery in Pennsylvania. Reports indicate that the airline’s board has met a couple of times to discuss this idea, and they might just be moving forward sooner than later. Obviously making your own oil—well, kind of—would be a great way to hedge fuel costs, but there’s definitely plenty of things that could go wrong or just get out of hand. The refinery is probably going to be up for sale for another month or two, and smarty-pants analysts are thinking that the place could sell for around $100 million.
Both Delta and ConocoPhillips have remained tight lipped about the possibility, but that hasn’t stopped investors and the financial types from making all kinds of speculations and conjectures. Obviously Delta would still have to get crude oil to the refinery before they could turn it into jet fuel, so there’s still plenty of steps in the way that could cut into their potential profits. However, Delta spent like $12 billion fuel in 2011, so anything to help lower that number could definitely please passengers and investors.