A Delta Air Lines subsidiary is boosting the supply of domestic crude oil at its refinery to reduce the carrier’s fuel costs.
Jet fuel is Delta’s No. 1 expense. When airlines raise fares, they often place the blame on high jet fuel prices.
Atlanta-based Delta bought the refinery near Philadelphia in 2012 to gain more control over its fuel costs.
Monroe Energy LLC, the subsidiary of Delta that operates its refinery in Trainer, Pa., announced Monday that it struck a five-year supply deal with energy logistics firm Bridger LLC.
Bridger will supply 65,000 barrels of domestic crude oil to Delta’s refinery, or about one-third of the crude oil refined by the facility.
The domestic crude oil from the Bakken oil fields in North Dakota costs less than the crude oil shipped to the refinery from overseas, reducing the overall cost of fuel for Delta.
Delta had been working to address the problem of how to transport the Bakken oil to the refinery. Bridger recently invested in $200 million to buy 1,300 new rail cars to add to its fleet, which will be used to transport oil to the Trainer refinery.
While the refinery is aimed at allowing Delta to gain more control over its fuel costs, the airline has struggled to bring the facility to profitability over the last two years. Delta earlier this year said it lost $41 million from operations of the refinery in the first quarter, but expected Trainer to be profitable in the second quarter.
