Delta Air Lines wholly-owned subsidiary, Monroe Energy LLC, has reached (30-Apr-2012) an agreement with Phillips 66 to acquire the Trainer refinery complex south of Philadelphia. As part of the transaction, Monroe will enter into strategic sourcing and marketing agreements with BP and Phillips 66. The acquisition includes pipelines and transportation assets that will provide access to the delivery network for jet fuel reaching Delta's operations throughout the Northeast, including its hubs at New York LaGuardia and John F Kennedy International airports. After receipt of USD30 million in state government assistance for job creation and infrastructure improvement from the Commonwealth of Pennsylvania, Monroe's investment to acquire the refinery will be USD150 million, and Monroe will invest USD100 million to convert the existing infrastructure to maximise jet fuel production. Production at the refinery combined with multi-year agreements to exchange gasoline, diesel, and other refined products from the refinery for jet fuel will provide 80% of Delta's jet fuel needs in the US. Standard & Poor's Ratings Services said (30-Apr-2012) that its ratings and outlook on Delta Air Lines Inc (B/Stable/--) are not affected by the company's plan. [more - original PR]
Delta subsidiary, Monroe Energy LLC, to acquire Trainer refinery complex
You may also be interested in the following articles...
Delta Air Lines' Shanghai hub plans: replicating the Amsterdam-KLM relationship will be difficult
At the same time as Delta Air Lines and its pilots take the lead in anti-Gulf rhetoric and ask for traffic rights to be withdrawn, brief comments by CEO Richard Anderson suggest Delta is considering establishing a hub in Shanghai.
A Shanghai presence would be a logical move for Delta, but establishing a hub will require the blessing of local partner China Eastern.
This Shanghai-China Eastern potential visually has similar building blocks to Delta's existing Amsterdam-KLM partnership; but the same outcome is far from guaranteed.
In the long term, Delta will need China Eastern more than China Eastern will need Delta. In this case the negotiating power does not rest in Atlanta. And, although both are SkyTeam members, China Eastern - and the other Chinese majors - have demonstrated considerable pragmatism in their partnership relations. Star Alliance's Air China for example holds a substantial minority share in oneworld's Cathay Pacific.
Virgin Atlantic and Delta Air Lines keep expanding their JV to provide blanket UK-US coverage
Delta Air Lines and Virgin Atlantic continue to steadily grow their trans-Atlantic joint venture with the expansion of markets outside the more competitive routes of London Heathrow to New York and Los Angeles. With the feed both airlines bring to the partnership, routes that would be unviable on a standalone basis are becoming promising.
The latest addition is a new service from Delta’s smaller Salt Lake City hub to London Heathrow to be launched during the summer travel season in 2016. Delta is also launching new service from JFK to Edinburgh in conjunction with Virgin Atlantic during that time, resulting in new competition to American Airlines.
Delta and Virgin Atlantic have quickly leveraged Virgin’s strong position at Heathrow to create an expansive trans-Atlantic network between the US and London, enabling the two carriers to close the gap with market leaders American and British Airways. At a bit more than a year and a half old, the joint venture is still in its early stages. But the rapid network changes initiated by Delta and Virgin Atlantic show the airlines are working to quickly spool up to the desired level of maturity for their tie-up.