The Week in Words: Selling a refinery; selling an oil company; monetizing 900 million users
The ConocoPhillips refinery in Trainer. Delta Air Lines announced last week that it will be purchasing the site to make its own jet fuel.
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#1 May 7, 2012
Let's see ... Oil professionals who MAKE jet fuel can't show a profit let alone a decent one, so an airline company figures IT knows how. What doesn't make sense about that?
Of course the idea is that Delta will get ITS fuel at a cut rate (in effect). That accounts for 20-25% of the refinery's output, but what does Delta plan to do with that other aprx. 60 - 70% of the refinery's output - the gasoline, fuel oil, solvents, etc.?
They will HAVE to market them like/and in competition with the other refineries in the area. Did anybody in the Executive Suite think about that? Furthermore, oil refinery professionals will now have to talk to and communicate refinery issues with airline managers. I don't think oil and sparkling-water mix.
AND, since the potential profits of the sale of jet fuel are gone, how will the airline incentivize the refinery employees? Look for declining employee morale to decline somemore.
Pardon the pun/s, but fasten your seat belts firmly across your laps. I don't think this will ... ah-h-h wait for it!... fly. Be back on the block in two years or less.
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