As Jet Fuel Costs Surge, This US Airline’s 15-Year Old Refinery Gamble Turns Profitable

Last Updated:April 09, 2026, 18:14 IST

Delta Air Lines refinery bet pays off as global jet fuel prices surge from Gulf supply disruptions, boosting earnings and cutting fuel costs while other airlines face pressure

Inside Delta’s Strategy: Owning a Refinery to Tackle Fuel Costs

The rising jet fuel prices are the biggest challenge for airliners as it consists of the primary operational cost. With the supply of crude oil constrained from the Gulf nations due to the closure of the Strait of Hormuz amid the ongoing conflict between the United States of America and Iran, jet fuel prices across the globe have risen, amplifying the burden on airlines and increasing margin pressure.

A long-term bet of a US-based airline company has yielded returns after 15-years.

While other airlines are grappling with the volatile prices of jet fuel, Delta Air Lines has its own refinery to access the jet fuel without depending on others.

WTI and Brent crude oil futures are holding near $100 per barrel, which are quite higher than $70 per barrel before the pre-war period.

Why Did Delta Air Line Make A Bet On Refinery?

In 2012, Delta bought the Trainer Refinery in Pennsylvania from Phillips 66 in a deal worth $150 million through its subsidiary Monroe Energy.

Delta had argued that jet fuel was one of the highest costs of airline and it wanted to have more control over fuel prices and supply. It added that owning a refinery would help it reduce costs and avoid price spikes.

Delta Chief Executive Officer Ed Bastian said refinery will continue help Delta when fuel is going to go. The airline said the refinery will boost its expected second-quarter earnings by $300 million, according to a report of The Wall Street Journal.

Delta’s refinery is operated through a subsidiary that sells jet fuel to the airline at prevailing market prices. This setup allows Delta to cut out third-party refining costs, essentially avoiding paying external suppliers to process crude into fuel. Analysts believe the refinery helps offset roughly one-third of increases in the crack spread.

According to Delta’s financial disclosures, the refinery is profitable in most years. The airline has also said that owning the facility provides a buffer against supply disruptions in the Northeast and reduces exposure to fuel price volatility, lowering jet fuel costs by a few cents per gallon. In 2022, when fuel prices spiked following Russia’s full-scale invasion of Ukraine, Delta estimated the refinery contributed savings of around $785 million.

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