Delta Air's refinery shows some positive promise, but the learning curve to success remains steep

Two years after Delta Air Lines made an unprecedented move to control its largest input cost by purchasing an oil refinery, no definitive conclusions can be drawn about the success of the endeavour. Ironically however, according to one analyst, Delta's investment has had sizeable benefits for its competitors; by using its own facility, Delta has reduced consumption in the open market, causing prices to fall.

Production at the airline's Trainer refinery has had fits and starts, and Delta has acknowledged that the learning curve in running a refinery was greater than its initial expectations.

But viewed through the lens of helping Delta improve its fuel cost management, Trainer is for the moment making a positive contribution to the airline's fuel strategy. However, is it only one element in Delta's fuel cost mitigation scheme, and much road lies ahead in effectively managing Trainer to deliver consistent returns.