The Travel Professor
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Wednesday, May 2, 2012

Delta Airlines novel way to fight fuel costs!

Buy a refinery! With a fuel bill of $300 million a year, it should come as no surprise that Delta Air Lines decided to do something about it: they bought a Phillips refinery in Trainer, Pa. But it raises another interesting question: will others follow?

The cost was $150 million. Today fuel makes up between 25% and 40% of an airline's costs. The Pennsylvania refinery's output will fulfill 80% of Delta's fuel needs in the US, the airline said.

Richard Anderson, Delta's CEO compared the modest investment to the cost of a new wide-body jet.  

I’m a cynic! Even with reduced fuel costs these savings will not be passed onto the customer. High fares and extra fees will remain the norm. It’s the all mighty corporate profit that Delta is chasing.