Boston, MA 10/25/2013 (wallstreetpr) – Ever since its purchase from Phillips 66 in 2012, the Delta Air Lines, Inc. (NYSE:DAL) oil refinery has been in losses. But for the first time, it reported a profit of $3 million in Q3.13. In the Q1.13, the refinery refined $22 million in losses and then again in Q2.13, it scaled its losses to $51 million. This is why following this encouraging performance, the refinery is now getting good and perhaps better plans to increase its profitability in the coming quarters, as DAL has indicated. The Pennsylvania oil refinery is being operated by DAL’s subsidiary Monroe Energy.
The acquisition of the refinery is one of the strategies that DAL is employing to scale down its operation costs, and in this particular case, it’s seeking to reduce its regional jet fuel costs. The refinery has a capacity of 185K barrels per day.
The refinery is apparently behind schedule in profitability as the company’s mandarins had expected it to turn profits or at least break even from the Q4.12. But that was not to be as instability of ethanol credit costs and Super Storm Sandy knocked it off the profitability path. But it has shown good signs of turning huge profits, considering that it came down from $51 million loss in Q2.13 to $3 million profit in Q3.13.
Delta’s annual fuel bill came to around $12 billion in both 2012 and 2011. The Pennsylvania oil refinery should be able to increase its earnings as DAL increases its operations domestically and internationally. Improvements of the Terminal 4 at JFK and installation of full flat beds are some of the improvements that are expected to boost DAL’s earnings which would in effect boost the earnings of its oil refinery. The performance of jet fuel refineries at the East Cost has not been very impressive lately and some have had to be sold off or shutdown.
