Delta bought an oil refinery. It didn’t go as planned.

Jet fuel is known as the Steady Eddie of the refinery business, a predictable profit maker that balances the seasonal gyrations of gasoline and diesel sales. But for airlines, it is a headache — a big and unpredictable expense that confounds managers. So Delta tried a bold experiment: It bought an oil refinery in 2012 outside Philadelphia, the first such purchase by a major US airline. When jet fuel prices were high, as they were then, Delta figured the refinery, which turns crude oil into the stuff that planes, cars and trucks burn, could offset some of its expenses and perhaps even make money. “A lot of energy guys hate it, and I can understand why, because we’re taking money out of their pockets,” Ed Bastian, the airline’s current CE and then president, said at an industry conference in 2012. But the refinery made only modest profits some years and lost money in others. This year, as the coronavirus hammered demand for air travel, it has become a liability for Delta, widely considered by analysts as one of the best-run airlines in the country. The energy industry critics Bastian dismissed appear to have correctly identified the flaws in Delta’s strategy. Like airlines, oil refining is a cyclical enterprise that can be difficult in the best of times — refineries are expensive to run, prone to accidents and subject to environmental regulations, yet earn meager profits. Story has more details.<br/>