We've been following for several weeks the back and forth speculation in the business press about Delta Air Lines getting into the oil business...yes, you read right. The oil business.
This week a credible new organization, Reuters, took the story beyond idle gossip and rumor mongering...
At first blush, the notion of an airline buying an oil refinery may seem like shear folly. Indeed, it may be, but consider the following:
- The price of fuel is killing the airlines right now. They've raised fares to compensate; they charge for bags; they've reduced the number of flights in the air. Yet, many airlines are expected to report first quarter losses.
- The cost of fuel is one thing the airlines have little, if any, control over. Wouldn't it be nice to have some control over it?
- According to Reuters, "Delta spent $12 billion on jet fuel last year, with its average pricing rising by 31 percent to $3.06 a gallon. Last year, the company's aircraft consumed 3.86 billion gallons or just over 250,000 barrels per day of jet fuel."
Would owning a refinery really lower the cost enough to make a difference?
Suppose that owning a refinery lowered the airline's overall fuel cost by just five cents a barrel. Do the math: 250,000 barrels a day, times 365 days a year. That's 91,250,000 total barrels a year. Now multiply that times a nickel. That's a savings of approximately $4.5 million. If Delta makes the purchase, it will be a very interesting experiment.
Allegiant says it will begin service from the mainland to Hawaii, beginning in June, from Fresno, CA and Las Vegas. This morning's announcement ends two years of speculation about which mainland cities would get the proverbial prize — Allegiant first announced its intent to fly to Hawaii in March of 2010.
We anticipate the service will be very popular, especially when customers take advantage of Allegiant's low pricing when bundling their air, hotel and car rental package."
Next Monday marks our third annual State of the Airport presentation. It's a chance to let the community know how the airport has fared the past year, and what we think the future holds. There are three main points:
Is the Federal Aviation Administration (FAA) ready to decide that an iPad (or almost any other gadget you may have) won't bring a plane down? Nick Bilton, with the New York Times, says maybe... "When I called the F.A.A. last week to pester them about this regulation — citing experts and research that says these devices could not harm a plane — the F.A.A. responded differently than it usually does. Laura J. Brown, deputy assistant administrator for public affairs for the F.A.A., said that the agency has decided to take a “fresh look” at the use of personal electronics on planes." 
