Airline buys refinery

As many of y'all know, I work here in the aviation field here in Atlanta.  The cost of fuel is the most volatile item on any transportation/aviation related field.  Companies try to plan expenses for the long term, it makes it easier to see how things are doing.  Well recently the local airline here in Atlanta purchased a refinery to better control the cost of fuel.  The projected savings will basically cover the cost of the purchase in 1 year.  That is a big savings in fuel cost.   the Atlanta Journal/Constitution(local fishwrapper) did a writeup on it recently.   Companies like Ford and American Standard among other conglomerates in the early part of the 20th century tried to control the cost of supplies from beginning to end to better control cost and quality.    later outsourcing became the vogue.  They say business works in cycles..this example bears it out.  It will be interesting if other airlines will try this also.

Monroe Energy officially acquires Trainer refinery, starts turnaround

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June 22, 2012

Photo: The Trainer Refinery Complex in Pennsylvania. 

Delta’s wholly-owned subsidiary Monroe Energy LLC has completed its transaction with Phillips 66 to acquire the Trainer Refinery Complex south of Philadelphia, taking the next step in Delta’s fuel management strategy.

Phillips 66 handed over keys to the facility to Monroe officials on Friday. Monroe will start turnaround activities after the July 4 holiday to get the idled refinery producing fuel later this fall. Trainer aims to capture refining costs for Delta in an effort to lower fuel spending that was nearly $12 billion in 2011.

“We have a team of refining experts and proven leaders effectively implementing our refining strategy at the Trainer refinery,” said Jeffrey Warmann, CEO and president of Monroe Energy, in a statement Friday.

Once reconfigured, Trainer will produce 52,000 barrels of jet fuel for Delta every day. The gasoline and diesel fuels created in the refining process will be swapped for more jet fuel around the country with partners BP and Phillips 66, and the combination of Trainer’s production and the product swap will give Delta 80% of its domestic fuel needs.

The project employs roughly 400 workers at Trainer, which had been idled since last fall. Those jobs indirectly support thousands of additional jobs in the region.

Delta and Monroe paid $150 million for Trainer after a $30 million grant from the Commonwealth of Pennsylvania and will invest more than $100 million to maximize Trainer’s jet fuel production. The annual savings in refining costs are estimated to be $300 million