With Atlanta-based Delta Air Lines' financial results and operating costs closely tied to fuel prices, the carrier is now being linked to bidding on an oil refinery.
The Oil Price Information Service, without naming sources in a jet fuel report this week, reported that Delta is "mentioned as a possible buyer" of a ConocoPhillips refinery in Trainer, Pa.
ConocoPhillips announced in September that it had begun the process of idling the facility about 10 miles from the Philadelphia airport and was seeking a buyer. The company said its decision to sell was "based on the level of investment required to remain competitive," adding that East Coast refining has been under "severe market pressure."
ConocoPhillips said that it would permanently close the plant if it couldn't make a sale. The United Steelworkers union has lobbied to keep the Trainer facility and other refineries in operation.
It is unclear what chances exist for completing such a deal involving Delta or a company affiliated with Delta. The airline declined to comment on "rumor or speculation." ConocoPhillips declined to comment in response to questions about Delta but said it is continuing to search for a buyer. The OPIS report said investment bank J.P. Morgan was tied to Delta as a potential partner, also citing unnamed sources.
Delta has said each penny increase in the price per gallon for jet fuel costs the airline about $40 million annually. The airline also said it paid $3 billion more for fuel last year than in 2010. It said a third of that increase came from the higher costs of refining crude oil into jet fuel, rather than from higher crude oil prices themselves.
Copyright 2012 The Atlanta Journal-Constitution
