Delta Airlines (DAL) has made arrangements to purchase the Trainer, Pennsylvania, refinery later this month for $180 million, which will allow it to start maintenance in early July. It will be the first ever deal by an airline to hedge its fuel requirement by way of purchasing a refinery, a measure which is expected to save $300 million per year on its fuel expense which touched $12 billion in previous year.
Delta Airlines will have possession of the refinery on June 22. Following the transfer of assets, workers will resume work on June 25.
The plant is expected to resume production 40 to 50 days after July 4. The major maintenance was due in 2011, but was delayed till the refinery was closed later in 2011. Delta said it planned to modify parts of the refinery so as to maximize jet fuel production, a process which would be completed during the third quarter.
Roughly 175 of the 220 hourly employees are expected to resume work, while the remaining either getting other employment or retiring or transferring. Delta will not engage itself in trading. The oil giant BP (BP.L) will supply crude oil.Previous Post » Gold Recaptures $1600 as Spain Bailout Hope Fades