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Delata, $DAL, Gambles With a Purchase of a Refinery

In a bid to reduce fuel costs Delta has purchased an oil refinery.

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  1. leftcoasttrader

    Initial reaction was thinking this was a pretty smart idea. Then I read a little more and discovered DuPont did essentially the same thing back in the 80’s for exactly the same reason and it never worked out. Reaction to the news then was apparently the same as the reaction today.

    Vertical integration doesn’t always work. Can an airline refine, store and ship fuel as well as an oil and gas company can? At least they are trying something new here. Hopefully it turns into more than another means of hedging where they just sell physical supply when prices increase while staying with their current distribution networks.

    One less airline pure play.

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    • Po Pimp

      I seriously doubt it will work out. A few years from now DAL will be writing off a ton of goodwill and other “intangible assets” due to this deal.

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