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Delta Airlines’ Oil Refinery: The Math Doesn’t Work – Seeking Alpha

Exxon Mobil Corp. (XOM), the world’s biggest energy company by market cap, reported its 4Q profit at a five-year high boosted by its refining arm from growing supplies of cheap U.S. oil. However, Delta Airlines (DAL) can’t tell a similar success story with its newly acquired refinery.

Delta paid $150 million for a Phillips 66 refinery in Trainer PA last May aiming to save $300 million a year in future fuel costs. At the time, many analysts saw this acquisition as a smart fuel hedge move by Delta. However, as I previously discussed, the actual implementation of this potential fuel cost savings could be quite problematic.

via Delta Airlines’ Oil Refinery: The Math Doesn’t Work – Seeking Alpha.

Boeing 787 Plane Works to Overcome Snags – NYTimes.com

A United Airlines 787 flying from Houston to Newark was diverted to New Orleans last Tuesday after one of its six electric generators failed midflight. That same day, the Federal Aviation Administration ordered inspections of fuel line connectors on all 787s, warning of a risk of fuel leaks and fires.

Aviation experts cast these issues as minor hiccups and said it was typical for new planes to experience such problems, particularly in the first few years of production.

On Monday, an aerospace analyst, David E. Strauss of UBS, raised another concern — whether the cost of building the planes was coming down fast enough for individual plane sales to become profitable by early 2015, as Boeing has projected.

Boeing officials have said that the company will earn enough on subsequent sales to average a percentage profit in the low single digits on the first 1,100 planes, which includes deliveries into 2021. Company officials said late Monday that they remained confident in their projections.

But in a research report, Mr. Strauss said that Boeing’s costs did not appear to be declining rapidly enough for sales to turn profitable in 2015 and that the program could continue to spend $4 billion to $5 billion more than it gained in revenue over the next three years. Unless the company can bring down the costs more quickly as it gains experience in building the planes, Mr. Strauss wrote, Boeing may not begin to make a profit on each plane until 2021.

via Boeing 787 Plane Works to Overcome Snags – NYTimes.com.

Emirates profit rebounds amid expanding fleet – Businessweek

The parent company of Dubai-based carrier Emirates said Monday that operating profit for the first half of the year surged by more than 63 percent as the Middle East’s biggest airline expanded routes and benefited from stabilizing fuel prices.

Emirates Group said operating profit rose to 2.37 billion dirhams ($645.7 million) for the first half of 2012 compared to 1.449 billion dirhams ($394.8 million) in the same period last year.

The 63.6 percent jump is a strong rebound after a sharp drop in profit for the fiscal year ending March 31 due to rising fuel costs. The company also was helped by less volatility across the wider Middle East after last year’s Arab Spring uprisings disrupted flight schedules.

Emirates Group includes Emirates airline and other businesses such as cargo operations and the travel service Dnata.

via Emirates profit rebounds amid expanding fleet – Businessweek.