Delta refinery limits costs as jet fuel prices climb
Delta Air Lines uses its refinery to offset rising jet fuel prices. The facility keeps refining profits internal as margins widen due to global supply issues.
In 2012, Delta Air Lines, Inc. made the unconventional decision to purchase an aging refinery near Philadelphia. While most carriers procure jet fuel from external suppliers, the Atlanta-based airline opted to process its own crude oil. This strategic move, which initially faced scrutiny over environmental concerns, has become a significant financial buffer as geopolitical tensions in Iran drive jet fuel prices higher.
The current market environment has highlighted the value of the Monroe refinery. As the "crack spread"—the price difference between crude oil and refined products—widens, most airlines face escalating costs. However, because Delta owns the facility, the profits generated from refining remain within the company. According to data from the International Air Transport Association, North American jet fuel averaged approximately $179 per barrel in late March, significantly higher than the $110 price for Brent Crude Oil.
